FEDERAL AGENCY FOR EDUCATION AND SCIENCE
STATE UNIVERSITY
DEPARTMENT OF EFP
Coursework on the subject "Enterprise Economics" on the topic:
FACTORS AFFECTING THE QUANTITY AND QUALITY OF PROFIT. PLANNING AND SPENDING PROFIT
Performed:
Checked:
Volgograd 2007
Introduction
1. Theoretical foundations
1.2 Factors influencing the amount and quality of profit
1.4 Profit distribution
2.1 Direct counting method
2.2 Analytical method
Conclusion
Bibliography
Introduction
The economic situation that developed in our country in the last decade of the 20th century and several years of ours requires enterprises to increase production efficiency, the competitiveness of products and services based on the introduction of scientific and technological progress, effective forms of management and production management, overcoming mismanagement and intensifying entrepreneurship.
Entrepreneurs strive to receive more and more income, to use natural, labor and investment resources as economically as possible and to realize as widely as possible such a resource as their creative and organizational (entrepreneurial) abilities in their chosen field of activity, which serves as a powerful incentive for the development and improvement of production and reveals creative possibilities private property.
The interest of enterprises in the production and sale of high-quality products that are in demand on the market is reflected in the amount of profit, which, other things being equal, is directly dependent on the volume of sales of these products. Profit is the simplest and at the same time the most complex category of a market economy. Its simplicity is determined by the fact that it is the core and main driving force of a market-type economy, the main incentive for the activities of entrepreneurs in the economy.
The purpose of this work is a theoretical and practical study of enterprise profit planning, identifying factors influencing the amount of profit.
Based on the purpose of the work performed, the following tasks were solved:
studying the concept of "profit";
consideration of factors influencing the amount and quality of profit;
consideration of profit planning methods;
analysis of the use of profits.
1. Theoretical foundations
1.1 The essence of the concept of profit and its composition
Profit is the monetary expression of savings created by enterprises of any form of ownership. As an economic category, it characterizes the financial result of entrepreneurial activity of enterprises. Profit is an indicator that most fully reflects production efficiency, the volume and quality of products produced, the state of labor productivity, and the level of costs. At the same time, profit has a stimulating effect on strengthening economic calculations and intensifying production.
Profit is one of the main financial indicators of the plan and assessment of the economic activities of an organization. The profits finance activities for scientific, technical and socio-economic development and increase the wage fund.
Profit is not only a source of meeting the intra-economic needs of an enterprise, but is also becoming increasingly important in the formation of budgetary resources, extra-budgetary and charitable funds.
Profit, as the final financial result of an enterprise, is the difference between the total amount of income and the costs of production and sales of products, taking into account losses from various business operations. Thus, profit is formed as a result of the interaction of many components with both positive and negative signs.
Each enterprise produces four profit indicators that differ significantly in size, economic content and functional purpose. The basis for all calculations is balance sheet profit - the main financial indicator of the production and economic activity of the enterprise. For tax purposes, a special indicator is calculated - gross profit, and on its basis - taxable profit and non-taxable profit. The part of the balance sheet profit remaining at the disposal of the enterprise after taxes and other payments have been made to the budget is called net profit. It characterizes the final financial result of the enterprise.
The main components of balance sheet profit are:
Profit from the sale of commercial products (works, services)
This type of profit represents the amount of net income created by the enterprise. It is determined by deducting from the total amount of revenue from the sale of products in current prices (excluding VAT, excise taxes, commodity sales discounts, export tariffs) the costs of production and sale of commercial products, included in the cost of production.
Profit (or loss) from other sales
It includes the financial result from the sale of fixed assets, their other disposal, and the sale of other property. This profit (or loss) is not related to the main types of economic activity of the enterprise reflected in its charter. In addition, profit from other sales may include profit (loss) of subsidiary farms, motor vehicles, logging and other types of farms on the balance sheet of the enterprise.
In a market economy, an enterprise independently manages its property, that is, writes off, sells, liquidates, and transfers it to other organizations. Profit (loss) arises only when the property is sold. When disposing of under-reinforced fixed assets, a loss may occur. Here, the financial result is calculated as the difference between the selling price of fixed assets and their unreinforced part, taking into account additional sales costs (dismantling, transportation, etc.).
Other property being sold includes raw materials, materials, fuel, spare parts, and intangible assets. With the formation of the financial market, other property of an enterprise is also understood as currency values (foreign currency, precious metals), and securities. The financial result from the sale of other property is determined based on the sale price minus their book value.
Profit (or loss) from non-operating income and expenses
Represent a financial result that is not related to the main activity of the enterprise and is not related to the sale of products, fixed assets and other property (for example, participation in the activities of other organizations, leasing of property, dividends and interest on shares, bonds and other securities, amounts received and paid in the form of sanctions (fines, penalties, penalties, etc.), other income from operations not directly related to the production of products (works, services)), which is defined as the difference between non-operating income and expenses (losses).
Gross profit is based on balance sheet profit, but differs from the latter in those enterprises that have barter transactions, exchange of property, sales of products at prices not higher than cost, which receive funds and production assets free of charge from other enterprises. Gross profit in barter transactions, exchange of property or sale of products at prices not higher than cost is calculated based on market prices for such products (property) and the cost (residual value) of products (property).
Profit generation looks like this (Fig. 1).
Rice. 1. Profit generation scheme
Rice. 2 Algorithm for projecting profit based on the main budget
In addition to the above factors, the amount of profit from sales is, of course, influenced by changes in the structure of manufactured and sold products. The higher the share of profitable products (calculated as the ratio of profit to the total cost of this product), the more profit the enterprise will receive. That is, an increase in the share of low-profit products will lead to a reduction in profits.
It is well known that any product goes through the stages of its life cycle: design, development, launch into production, serial production, and as a result, the market is saturated with this product. Over time, products become obsolete or cannot withstand competition and, under the pressure of declining profitability, their production is reduced or discontinued (Fig. 3).
Fig.3 Dependence of profit on product life cycle
To maintain the level of profit at the enterprise, it is important to determine the moment when the design and launch of new products begins. The fact is that the design and development stage of products takes a certain time, during which the enterprise incurs losses (0; t 1). Then, from the moment the product is launched into production (t 1), losses begin to decrease and after some time the break-even point is reached (t 2). As sales volume increases, profit also increases due to a decrease in the share of fixed costs (t 2 ; t 4). When equilibrium between supply and demand is achieved, the profit margin stabilizes and remains at a constant level for some time (t 4; t 7). This situation can persist for quite a long time in the absence of a threat from competitors and with stable demand for products. In the presence of competitors, maintaining sales levels is achieved by reducing profitability, i.e. lowering prices due to a share of profits. Efficiency begins to decline (t 7; t 9).
With increasing competition, the enterprise is unable to further maintain sales levels by reducing prices, since the work becomes ineffective and unprofitable. To maintain efficiency, the company needs to reduce costs in proportion to the price reduction or switch to producing other products, the demand for which has not yet been exhausted. Therefore, enterprises must begin developing a new type of product at the stage of profit growth (t 3) so that by the time the profitability of old products begins to decline, the release of new products reaches the break-even point (t 6). Such a strategy will allow you to constantly maintain the achieved level of profitability and even, under favorable conditions, increase it (t 7; t 8).
Improvements in product quality, design, technical improvements and other techniques to maintain demand for products require additional costs and therefore must also be applied long before profitability levels begin to decline, or at least as soon as such a trend emerges. Moreover, at the peak of demand, an improvement in the product offered may lead to an increase in its price and, accordingly, profit.
Thus, the main factors discussed above that affect the volume of profit from the sale of commercial products, both upward and downward, should be the subject of careful analysis, primarily on the part of the enterprise.
1.3 The essence and methods of profit planning
The most important role of profit, which increases with the development of entrepreneurship, determines the need for its correct calculation. The successful financial and economic activities of the enterprise will depend on how reliably the planned profit is determined.
The calculation of planned profit must be economically justified, which will allow for timely and complete financing of investments, an increase in own working capital, appropriate payments to workers and employees, as well as timely settlements with the budget, banks and suppliers. Therefore, proper profit planning in enterprises is of key importance not only for entrepreneurs, but also for the economy as a whole.
Profit is planned separately by type: from the sale of marketable products, from the sale of other non-commodity products and services, from the sale of fixed assets and other property, as well as from non-operating income and expenses. Separate planning is due to differences in the methodology for calculating and taxing profits from various types of activities.
Profit planning is an integral part of financial planning. In the process of developing financial plans, all factors influencing the amount of profit are taken into account, and financial results from making various financial decisions are modeled.
Profit planning uses all the parameters of a business plan and is decisive in determining the financial result of all activities of the organization. You should understand the connection between profit planning and the parameters of the production, economic and financial activities of the enterprise, study the most significant relationships in the economy of the enterprise and understand their impact on profit. This will help you better understand the factors influencing profit growth.
In a steadily developing economy, profit planning is carried out for a period of three to five years. With relatively stable prices and predictable business conditions, current planning within one year is common. In an unstable economic and political situation, planning is possible only for a short period - a quarter, a half-year.
For profit planning, direct counting, analytical and method based on the effect of production (operating) leverage are used.
Let's consider the main ways of planning profit from the sale of commercial products. The main ones are the direct counting method and the analytical method. Let us use examples to reveal these domestic traditional methods of calculating profit in order to formulate on their basis an integrated approach to maximizing profit, taking into account foreign practice.
The direct counting method is most widely used in organizations in modern economic conditions. It is used, as a rule, with a small range of products. Its essence lies in the fact that profit is calculated as the difference between the proceeds from the sale of products at appropriate prices and its full cost minus VAT, excise taxes and sales tax.
P - planned profit,
B - output of commercial products in the planning period in physical terms,
P - price per unit of production (less VAT, excise taxes and sales tax),
C is the total cost per unit of production.
The calculation of profit is preceded by determining the output of comparable and incomparable commercial products in the planning year at full cost and in prices, as well as the balance of finished products in the warehouse and goods shipped at the beginning and end of the planning year.
Calculating profits using this method is simple and accessible. However, it does not allow us to identify the influence of individual factors on the planned profit and, with a large range of products, is very labor-intensive.
The analytical method of profit planning is used for a large range of products, and also as an addition to the direct method for the purpose of its verification and control. The advantage of this method is that it allows you to determine the influence of individual factors on planned profit. With the analytical method, profit is determined not for each type of product produced in the coming year, but for all comparable products as a whole.
Calculating profit using this method consists of three successive stages:
determination of basic profitability as the quotient of dividing the expected profit for the reporting year by the full cost of comparable commercial products for the same period;
calculating the volume of marketable products in the planning period at the cost of the reporting year and determining the profit on marketable products based on basic profitability;
taking into account the influence of various factors on the planned profit.
With this method, profit on incomparable products is determined separately.
The profit plan for the next year is developed at the end of the reporting period. Therefore, to determine basic profitability, reporting data for the elapsed time (usually for 9 months) and the expected implementation of the plan for the period remaining until the end of the year (for the fourth quarter) are used.
Profit in the reporting period is taken in accordance with the price level in effect at the end of the year. Therefore, if during the past year there were changes in prices or VAT and excise tax rates that affected the amount of profit, then they are taken into account when determining the expected profit for the entire reporting period, regardless of the time of the changes. If, for example, prices were increased from October 1 of the reporting year, then this increase should be extended for the entire period until October 1, since otherwise the level of profitability of the reporting year cannot serve as a base for the planned one.
Based on the level of basic profitability found in this way and the planned volume of commercial products at the cost of the reporting year, the profit of the planned year is calculated taking into account the influence of one factor - changes in the volume of comparable commercial products.
Since the planned level of profitability differs from the base one as a result of changes in costs, prices, assortment, grade, then at the next stage of planning the influence of these factors on the planned profit is determined. For the final calculation of the planned profit from sales of products, the profit on the balances of finished products and goods shipped at the beginning and end of the plan year is taken into account.
It is worth noting that profit from other sales is planned using the direct accounting method. Only if the share of these products (services) is insignificant, profit from sales is determined based on its planned volume in the planning year and the profitability of the past.
Profit (loss) from traditional items of non-operating income and expenses (fines, penalties, penalties, etc.) is determined, as a rule, on the basis of previous years. As for such items as income from equity participation in the activities of other enterprises, from leasing property, dividends, interest on shares and other securities, they are planned depending on forecasts for the development of the business activity of a given economic entity.
In addition, there is a so-called combined calculation method, which uses elements of the first and second methods. Thus, the cost of marketable products in prices of the planned year and at the cost of the past year is determined by the direct counting method, and the impact of various factors on the planned profit is determined using the analytical method.
To predict the maximum possible profit in a planning year, it is advisable to compare revenue from product sales with the total amount of costs, divided into variable (change in proportion to changes in production volume: costs of raw materials, materials, electricity, etc.) and constant (do not change depending on growth or reduction in production volume: depreciation charges, salaries of management personnel, administrative expenses, etc.)
The calculations presented in the second chapter make it possible to determine the so-called “operating leverage effect” - a phenomenon when, with a change in sales volume (revenue from product sales), a more intense change in profit occurs in one direction or another.
The degree of impact of operating leverage is determined by the following formula:
B - contribution to coverage (the difference between sales revenue and variable costs),
P - profit.
When studying the relationship between fixed and variable costs and profit, production break-even analysis plays an important role.
First of all, the so-called break-even point (dead point, critical point, breakeven point, profitability threshold) will be determined. This point corresponds to the sales volume at which the company covers all fixed and variable costs without making a profit.
It is used to determine the threshold beyond which sales volume ensures profitability, i.e. product profitability. This can be represented more clearly graphically (Fig. 4).
Fig. 4 Determination of the break-even point
Direct lines 1 - 3 show the dependence of variable costs, fixed costs and revenue on production volume.
The point of critical production volume shows the volume of production at which sales revenue is equal to its full cost.
The sales volume corresponding to the break-even point (B) is determined as:
3 post - fixed costs,
But when determining a strategy, the company must also take into account the margin of financial strength (FS), i.e. estimate sales volume above break-even level:
ZPF = ((V sales. cost - B) / V sales. cost) * 100%.
Having a large margin of financial strength, a company can develop new markets, invest funds both in securities and in production development.
Maximizing profits by changing the share of variable and fixed costs, determining the break-even point and the margin of financial strength opens up the opportunity for entrepreneurs to plan for the future the amount of profit growth depending on economic success in the production of competitive products and take appropriate measures in advance to change in one direction or another the value of variables and fixed costs. Forecast calculations are important not only for the enterprises and organizations themselves that produce and sell products (services), but also for shareholders, investors, suppliers, creditors, banks associated with the activities of a given entrepreneur, participating with their own funds in the formation of its authorized capital. Therefore, planning the optimal amount of profit in modern economic conditions is the most important factor in the successful business activities of enterprises and organizations.
1.4 Profit distribution
Receiving profit, the enterprise solves the problem of its use. The nature of the areas for using profits reflects the strategic objectives of the enterprise. By paying dividends, the company stimulates the growth of the value of its shares, leaving profits in the company, shareholders invest in the development of production. A financier must be able to set strategic goals and formulate tasks to achieve them. The mechanism of influence of finance on the economy, on its economic efficiency, is not in production itself, but in distributive monetary relations.
Distribution of profit is an integral and inextricable part of the overall system of distribution relations and, perhaps, along with the distribution of income of individuals, the most important.
In essence, the distribution of profit should be considered in three directions (Fig. 5).
Profits are distributed between the state, the owners of the enterprise and the enterprise itself. The proportions of this distribution significantly affect the efficiency of the enterprise, both positively and negatively.
The most important obligations of enterprises to the state include the payment of income tax. The procedure for calculating this tax includes several stages: correct calculation of taxable profit; choice of tax rates and benefits; ensuring timeliness and completeness of budget payments.
Taxable income is the gross profit of the enterprise. In the process of profit distribution, it is adjusted, since different tax rates are applied to individual incomes. Taxable profit (N) can be defined as:
N = B - R - C - D - I - O - X - F, where
B - gross profit;
R - rent payments;
C - income received from securities;
D - income received from equity participation in other enterprises of the Russian Federation;
I - income from casinos, video salons, and slot machines;
O - profit from intermediary operations;
X - profit from the production and sale of agricultural products;
F - contributions to reserve and other similar funds.
First of all, rent payments are subtracted from gross profit. These payments are made by those enterprises that generate additional income (differential rent) due to particularly favorable natural conditions. For example, a rent payment is an excise tax on oil produced from the best mining and geological deposits. Here, rental payments are determined at specifically established rates.
Income from securities, equity participation, casinos and intermediary operations are also subject to different tax rates. This requires maintaining separate records by type of activity, which avoids double taxation.
Profit from the production and sale of agricultural products is excluded from gross profit, since it is not taxed.
Enterprises can create reserve funds, but not higher than 25% of the authorized capital and 50% of taxable profit. In this case, profit is reduced by the amount of contributions to the reserve fund.
When determining taxable profit, it is necessary to take into account benefits for individual enterprises, which can be established in the following forms: complete exemption from tax (for example, agricultural products, profits of religious associations, public organizations of the disabled, profits from the production of baby food, museums, theaters); reduction of taxable profit (for example, when directing profit to the development of one’s own production base); lowering tax rates (for example, when using the labor of disabled people, pensioners); provision of “tax holidays” (deferment of payments to the budget), investment tax credit (deferment of tax payment on profits if it is reinvested in production in the amount of the tax reduction), “carrying forward losses” (means that an enterprise that received a loss in the previous year is exempt from paying tax on that part of the profit that is used to cover losses for 5 years).
In an enterprise, profit after taxes and dividends is subject to distribution.
The distribution of this part of the profit reflects the process of formation of funds and reserves of the enterprise to finance the needs of production and social development.
In a market economy, the state does not interfere in the process of distribution of profits remaining at the disposal of the enterprise after paying taxes. Nevertheless, by providing tax incentives, it stimulates the use of profits for capital investments for industrial purposes and housing construction, for charitable purposes, financing of environmental protection measures, expenses for the maintenance of social facilities and institutions, and for conducting research work. The minimum amount of reserve capital for joint-stock companies is established by law, and the procedure for creating a reserve for doubtful debts and for the depreciation of securities is regulated.
The distribution of profits remaining at the disposal of the enterprise is regulated by the internal documents of the enterprise, as a rule, in the accounting policies. Some aspects of the distribution process are fixed in the enterprise charter. In accordance with the charter or decision of the administrative body, funds are created at the enterprise: savings, consumption, social sphere. If funds are not created, then in order to ensure the planned expenditure of funds, cost estimates are drawn up for the development of production, the social needs of the workforce, material incentives for workers and charitable purposes.
Expenses associated with the development of production and financed from profits include expenses for: research, design, development and technological work; financing the development and implementation of new products and technological processes; costs of improving technology and organizing production, modernizing equipment; costs associated with technical re-equipment and reconstruction of existing production, expansion of the enterprise and new construction of facilities, and implementation of environmental protection measures. This group also includes expenses for repaying long-term bank loans and interest on them. The accumulated profit of an enterprise can be invested by it in the authorized capitals of other enterprises, long-term and short-term financial investments, transferred to higher organizations, unions, concerns, associations, etc. These areas are also considered to be the use of profits for development.
Distribution of profits for social needs includes: expenses for the operation of social facilities on the balance sheet of the enterprise, financing the construction of non-production facilities, holding recreational and cultural events, etc.
The costs of material incentives include: payment of bonuses for achievements in work, costs of providing material assistance, one-time benefits to veterans and pensioners, compensation for the increase in the cost of food in canteens, etc.
Some types of fees and taxes are paid from net profit, for example, a tax on the resale of cars, computer equipment and personal computers, a fee on transactions for the purchase and sale of currency on exchanges, a fee for the right to trade, etc.
In addition, if an enterprise violates the current legislation, it is the profit remaining at the disposal of the enterprise that serves as a source for paying various fines and sanctions. Thus, fines are paid from net profit for compliance with environmental protection requirements from pollution, sanitary standards and rules. If regulated prices for products (works, services) are increased, the profit illegally obtained by the enterprise is recovered from the net profit.
In case of concealment of profits from taxation or contributions to extra-budgetary funds, penalties are also collected, the source of payment of which is net profit.
All profit remaining at the disposal of the enterprise is divided into profit that increases the value of the property, i.e. participating in the process of accumulation, and profit directed to consumption, which does not increase the value of property. If the profit is not spent on consumption, then it remains in the enterprise as retained earnings from previous years and increases the size of the enterprise's equity capital. The presence of retained earnings increases the financial stability of the enterprise and indicates the presence of a source for subsequent development.
The size of reserve capital plays an important role in ensuring financial stability (it must be at least 15% of the authorized capital). In a market economy, contributions to reserve capital are a priority. The presence and growth of reserve capital ensures an increase in shareholder ownership, characterizes the enterprise’s readiness to take risks, which all business activities are associated with, creates the possibility of paying dividends on preferred shares even in the absence of profit for the current year, covering unforeseen expenses and losses without the risk of loss of financial stability.
2. Analysis of planning methods
2.1 Direct counting method
Let's look at an example of calculating profit using the direct counting method.
Initial data:
the company will produce 30,000 units of finished products in the planned year;
wholesale price per unit (excluding VAT, excise taxes and sales tax) - 15,000 rubles;
production cost according to the report for the past year - 10,000 rubles;
in the planning year, the reduction in the production cost of finished products should be 5%, and the cost of selling products should be 0.5% of the products sold at production cost;
the balance of finished products in the warehouse and goods shipped at the beginning of the planned year is 1,500 units, at the end of the planned year - 500 units.
the balance of finished products and goods shipped at the beginning of the planning year at production cost, taking into account that these products were produced in the reporting year, will be equal to:
He. g. = 10,000 rub. * 1,500 units = 15,000,000 rub.
The production cost of a unit of production in the planning year will be 9,500 rubles, then the volume of marketable products in the planning year at production cost will be:
V plan = 9,500 rub. * 30,000 units = 285,000,000 rub.
the balance of finished products and goods shipped at the end of the plan year, considering that they were produced in the plan year, at production cost will be:
About year = 9,500 rub. * 500 units = 4,750,000 rub.
The volume of product sales at production cost in the planning year, taking into account carryover balances, will be:
V real. prod. = 15,000,000 + 285,000,000 - 4,750,000 = 295,250,000 rub.
The cost of selling products is:
P real = (295,250,000 * 0.5%) /100% = 1,476,250 rub.
The volume of product sales at full cost is equal to:
V real. full = 295,250,000+ 1,476,250 = 296,726,250 rub.
Volume of sales:
in kind: V real. = 1,500 + 30,000 - 500 = 31,000 units;
at wholesale prices: V real. = 15,000 rub. * 31,000 units = 465,000,000 rub.
Thus, the profit from sales of products in the planning year will be:
P real. = 465,000,000 - 296,726,250 = 168,273,750 rub.
2.2 Analytical method
Let's consider an example of calculating profit using the analytical method.
Let's determine the basic profitability (Table 1).
Table 1
| Indicators |
in 9 months |
IV quarter |
Expected execution for the current year |
| 1. comparable products of the past year: a) at current prices (excluding VAT, excise taxes and sales tax), b) at full cost, thousand rubles. 2. profit on the volume of comparable commercial products (line 1a - line 1b), thousand rubles. 3. adjustments to the amount of profit in connection with price changes that occurred during the year (+ or -) from the beginning of the year to the date of change, thousand rubles. 4. profit taken as the base (line 2 + line 3), thousand rubles. 5. basic profitability,% ((page 4 * 100) / page 1b) |
2.1 In the plan year, an increase in comparable marketable products by 10% is envisaged. The output of these products at the cost of the reporting year will be:
V from. g. = (810 * 110%) /100% = 891 thousand rubles.
2.2 Profit on comparable products in the planning year, based on the basic level of profitability, will be equal to:
P plan. compare = (891 *48.8%) /100% = 438.4 thousand rubles.
2.3 Let in this example the incomparable commercial products of the planned year be accepted at the planned full cost in the amount of 250 thousand rubles, and at current prices (excluding VAT, excise taxes and sales tax) - 300 thousand rubles. Then, the profit on incomparable commodity products in the coming year will be:
P plan. incomparable = 300 - 250 = 50 thousand rubles.
3. At this stage of calculations, the influence of individual factors on the amount of planned profit is taken into account.
3.1 Let the output of comparable commercial products in the planning year at the cost of the coming year be calculated in the amount of 1,400 thousand rubles. We know that the same comparable products, but at the full cost of last year, were determined in the amount of 891 thousand rubles. Then, the increase in the cost of comparable products is equal to:
Which will entail a decrease in planned profit by 509 thousand rubles. This can be explained by an increase in prices for consumed inventory items, an increase in wages due to an increase in the minimum monthly wage and other factors.
3.2 In order to determine the impact of assortment shifts on profit, the share of each product in the total volume of comparable commercial products at full cost in the past and planned year is calculated.
Then the share of each product in the reporting and planning year is multiplied by the reported profitability of this product, taken at the level of expected performance.
The sums of the obtained coefficients reflect the average level of profitability in the past and planned years. The difference between them shows the impact of assortment shifts on planned profit (Table 2).
table 2
So, the average profitability in the planned year will increase compared to the reporting year by:
This means that a change in the product range in the planned year in the direction of increasing the share of the most profitable products will lead to an increase in profits by:
3.3 The size of the planned profit is also affected by price changes in the planning period. If prices decrease or increase, the estimated percentage of decrease or increase should be calculated based on the volume of the relevant product. The amount received from a decrease or increase in prices will affect the decrease or increase in planned profit.
Let prices for all marketable products sold be expected to increase in the planning year by 21% due to inflationary processes. If the planned output of commercial products, calculated in prices, is, for example, 1,650 thousand rubles, then profit will be received only due to this factor in the amount of:
But for the reasons stated above, this factor in increasing profits cannot be considered positive.
4. For a summary calculation of profit, you should take into account the profit in the balances of finished products at the beginning and end of the planning year, for example 120 thousand rubles. and 210 thousand rubles. respectively.
5. Thus, the planned profit from the sale of marketable products will be:
P plan = P plan. compare + P plan. incomparable - + +
P plan = 434.8 + 50 - 509 + 4.01 + 346.5 +120 - 210 = 236.31 thousand rubles.
2.3 Method based on the operating leverage effect
Now let's look at an example of calculating profit using the third planning method.
First, let's look at an example of what the “operating leverage effect” is.
V sales - sales volume - in 2006 = 1,820 thousand rubles, incl.
3 variable - variable costs - 1,238 thousand rubles, and
3rd post - fixed costs - 197 thousand rubles, therefore
3 scoop - total costs - 1,435 thousand rubles.
Then the profit will be equal to:
P = 1,820 - 1,435 = 385 thousand rubles.
If in 2007 revenue increases by 10% and thus amounts to:
In real = (1,820*110%) /100% = 2,002 thousand rubles,
then variable costs will also increase by 10% and will be equal to:
3 variable = (1,238*110%) /100% = 1,362 thousand rubles.
Since fixed costs will not change, then:
3 scoop = 1,362 + 197 = 1,559 thousand rubles,
profit will be:
P = 2,002 - 1,559 = 443 thousand rubles,
which means that profit increased compared to last year by:
Therefore, with an increase in revenue from product sales by 10%, profit will increase by 15%.
If you check the impact on profit growth not only of variable, but also of fixed costs, it turns out that as fixed costs increase, other things being equal, the rate of profit growth decreases.
The above calculations allow us to determine the degree of impact of operating leverage
In our example, the impact of operating leverage in 2006 is determined as follows:
O = (1820 - 1238) /385 = 1.5
That is why an increase in sales volume by 10% entails an increase in profits by 15%.
Having determined the impact of the cost structure on profit using the impact of operating leverage, we can conclude: the higher the share of fixed costs and, accordingly, the lower the share of variable costs with a constant sales volume, the stronger the impact of operating leverage. However, if you increase fixed costs uncontrollably, then business risk will sharply increase, since if at the same time revenue from sales of products decreases, the enterprise will suffer large losses in profit.
The sales volume corresponding to the break-even point (B) is determined as:
B = Z post / (1-Z variable /V sales cost), where
3 post - fixed costs,
Z variable - variable costs,
V sales. cost - sales volume in value terms.
For example:
V sales = 1,000 units,
V sales. cost = 3,600 thousand rubles,
3 changes = 2,160 thousand rubles,
3 post = 1,000 thousand rubles,
Thus, the profit is 440 thousand rubles, the cost per unit of production is 3,600 rubles, and
B = 1,000/ (1-2160/3600) = 2,500 thousand rubles.
In physical terms, the quantity of products sold at the break-even point is 694 units (2,500,000/3,600). This means that the proceeds from the sale are 694 units. products cover all costs without making a profit. Implementation of each additional one in excess of 694, i.e. beyond the break-even point, will make a profit.
Such calculations are very relevant in the current conditions, since enterprises can predict break-even activities in advance.
Based on the previous example, we determine the margin of financial strength:
ZPF = ((3,600 - 2,500) /3,600) * 100%= 30.6%
This means that the firm can reduce production and sales by 30.6% before reaching the breakeven point.
Conclusion
So, profit is the final financial result that characterizes the production and economic activities of the entire enterprise, that is, it forms the basis for the economic development of the enterprise. Profit growth creates a financial basis for self-financing of the enterprise's activities, carrying out expanded reproduction. Due to it, part of the obligations to the budget, banks and other enterprises is fulfilled. Thus, profit becomes the most important for assessing the production and financial activities of an enterprise.
The success of the financial and economic activities of an enterprise depends on how reliable the planned profit is. The simplest and most common method of profit planning is the direct counting method. But it does not allow us to identify the influence of individual factors on the planned profit and, with a large range of products, is very labor-intensive, but the analytical method of profit planning allows this. A method such as the combined calculation method allows one to plan for the future the size of profit growth depending on economic success in the production of competitive products and take appropriate measures in advance to change certain costs.
The amount of profit depends on the production, supply, sales and financial activities of the enterprise. Therefore, under new economic conditions, the transition of industrial enterprises to a market economy, one of the most important indicators for assessing the effectiveness of their activities is profit - a generalizing qualitative indicator of economic efficiency. Profit is an indicator that most fully reflects production efficiency, the volume and quality of products produced, the state of labor productivity, and the level of costs.
A joint stock, rental, private or other form of ownership of an enterprise, having received financial independence and independence, has the right to decide for what purposes and in what amounts to direct the profit remaining after paying taxes to the budget and other obligatory payments and deductions. Profits in market conditions are used not for consumption, but for investments and innovations, which ensure the economic growth of the enterprise and its competitiveness.
Bibliography
1. Bakadorov V.L., Alekseev P.D. Financial and economic condition of an enterprise: a practical guide. - M.: Prior, 2000
2. Kovaleva A.M., Lapusta M.G., Skamai L.G. Company finances: a textbook for universities / State. University of Management. - M.: Infra-M, 2000.
3. Lyubushin N.P. Analysis of the financial and economic activities of the enterprise. - M.: Unity-Dana, 2003.
4. Popova R.G., Samonova I.N., Dobroserdova I.I. Enterprise finance. - SPb.: PETER, 2002.
5. Semenov V.M. Enterprise finance: a textbook for universities. - M: Finance and Statistics, 2005.
6. Finance: textbook for universities / St. Petersburg. University of Economy and Finnish (FINEK); edited by M.V. Romanovsky, O.V. Vrublevskaya, B.M. Sabanti. - M.: Yurayt, 2004.
7. Finance and credit: textbook / ed. A.M. Kovaleva. - M.: Finance and Statistics, 2004.
8. Finance and credit: a textbook for universities in economics. Specialties / ed. M.V. Romanovsky, G.N. Beloglazova. - M.: Higher Education, 2006.
Ticket number 16. Profit and factors influencing it. Profit distribution
Profit occupies one of the important places in the overall system of a market economy. It ensures the economic stability of the company and guarantees its complete financial independence. In market conditions, it is profit that determines the decision of what, how and in what quantities to produce. Every entrepreneur tries to answer the question: at what quantity of goods produced (sold) and at what price can the maximum profit be obtained?
Profit - the excess of income from the sale of goods and services over the costs of producing and selling these goods and services. This is a general indicator of the financial results of the economic activity of an enterprise.
Gross revenue – This is the total amount of cash receipts from the sale of commercial products, works, services and material assets.
Gross income of the enterprise – the difference between sales revenue and material costs includes labor and profit.
Profit functions:
1. Distribution;
2. Stimulating.
Types of profit:
1. Accounting – part of the company's income that remains from total revenue after compensation for external costs, i.e. fees for supplier resources.
2. Economic (net) – what remains after subtracting all costs (external and internal) from the firm’s total income.
3. Balance sheet – the difference between revenue from sales of products and the sum of material costs, depreciation and wages. It is sometimes called total profit, because... It is she who is the source of distribution and use of enterprise funds.
Every business strives to maximize its profits. If a firm increases its output, total profit increases, but up to a certain limit, as long as marginal revenue is greater than marginal cost. That's why the first condition of profit is marginal revenue equals marginal cost (MR=MC).
The behavior of firms maximizing their profits under conditions of perfect competition and pure monopoly has significant differences.
1) In conditions of perfect competition, price is a given value for the company. Moreover, the company can sell any number of units of goods at this price. In this case, price equals average revenue and marginal revenue. The influx of new firms into the industry will lead to a decrease in the price of goods, so the profits of firms will decrease. When the price becomes equal to average costs, the process of influx of firms into the industry will stop. So, price (P) = prev. revenue (MR) = prev. costs (MC) = avg. costs (AC).
2) In a pure monopoly, the price is not a given value. The entrepreneur realizes that the more products he produces, the lower the selling price will be. Therefore, a monopolist firm tries to produce less products at a higher price. Or it reduces costs by increasing the scale of production and reduces the price. So, P>MR=MC.
Factors influencing the amount of profit.
1) Internal factors, which influence the profit margin of the enterprise through increasing the volume of output and sales of products, improving product quality, increasing selling prices and reducing production and sales costs.
Internal factors for increasing enterprise profits:
Level of management;
Competence of management and managers;
Product competitiveness;
Level of organization of production and labor, etc.;
Labor productivity;
State and effectiveness of production and financial planning.
Internal factors are divided into:
Production - characterize the availability and use of means and objects of labor, labor and financial resources;
Non-productive - associated with supply, sales and environmental activities, social conditions of work and life.
Production factors are divided into:
Extensive - influence the process of making a profit through quantitative changes: the volume of means and objects of labor, financial resources, equipment operating time, number of personnel, working time fund
Intensive factors influence the process of making a profit through “qualitative” changes:
Increasing equipment productivity and quality;
Use of advanced types of materials and improvement of their processing technology;
Acceleration of turnover of working capital;
Improving the qualifications and productivity of personnel;
Reducing labor and material intensity of products;
Improving labor organization and more efficient use of financial resources, etc.
External factors- these factors do not depend on the activities of the enterprise, but can have a significant impact on the amount of profit:
Market conditions;
Price level for consumed materials, raw materials and fuel and energy resources;
Depreciation rates;
Natural conditions;
State regulation of prices, tariffs, interest rates, tax rates and benefits, penalties, etc.
The entire set of factors can be divided into internal and external. They are closely related to each other. Among the internal factors are the following:
- volume of retail turnover . With a constant share of profit in the price of goods, an increase in the volume of sales of goods allows you to receive a larger amount of profit;
- commodity structure of retail turnover . Expansion of the assortment contributes to the growth of trade turnover. An increase in the share of goods of higher quality that are prestigious in the turnover allows for an increase in the share of profit in the price of the product, since buyers more often purchase these goods precisely because of their prestige and in the expectation of greater ease of use. This helps improve profitability;
- organization of goods distribution . Accelerated promotion of goods into the retail chain helps increase turnover and reduce operating costs. As a result, the mass and level of profit increase.
- rationalization of trade -technological process of selling goods . To make a profit, it is necessary to use progressive methods of selling goods: self-service, selling goods using samples and catalogs. This contributes to an increase in the volume of trade turnover, as well as a reduction in its cost intensity;
- number and composition of employees . Sufficient numbers at a certain level of technical equipment of labor make it possible to fully implement the enterprise’s program to obtain the required amount of profit. The level of qualifications of workers is of great importance;
- forms and systems of economic incentives for workers . The influence of this factor can be assessed through the indicator of labor costs, as well as through the indicator of profitability of labor costs. Currently, the role of moral encouragement for workers and their satisfaction from their work is increasing;
- labor productivity of enterprise employees . An increase in labor productivity, other things being equal, entails an increase in the amount of profit and an increase in the profitability of the enterprise;
- capital-labor ratio and technical equipment of workers . The higher the equipment of workers with modern equipment, the higher their labor productivity;
- financial condition -technical base of the enterprise. An enterprise that has a more modern and developed material and technical base has the prerequisites for a constant increase in retail turnover in the long term. This entails an increase in the amount of profit received and increased profitability;
- state and development of the trading network, its territorial location . The location and structure of the retail network has a direct impact on the amount of profit and profitability. The development of not only a stationary store network, but also small retail, parcel and mobile networks can have a serious impact on profit indicators;
- moral and physical wear and tear of fixed assets . This factor is very important for increasing the profitability of the enterprise. The use of worn-out fixed assets and obsolete equipment does not allow us to count on an increase in profits in the future;
- return on assets . With an increase in capital productivity, retail turnover increases per 1 ruble. funds invested in fixed assets;
- amount of working capital . The greater the amount of working capital an enterprise has, the greater the amount of profit it receives as a result of their one turnover;
- applicable pricing procedure . The amount of profit received depends on the amount of costs included in the price of the product. A constant increase in the share of costs in the price of a product can lead to the opposite result. The amount of profit included in the price of the product has the same effect - a constant increase in the share of profit in the price of the product can lead to a decrease in the total amount of profit;
- organizing work to collect accounts receivable . Timely collection of accounts receivable helps to accelerate the turnover of working capital, hence increasing profits;
- organization of claims work with clients, as well as work with packaging . This factor directly affects the amount of profit from non-operating operations;
- implementation of the economy regime . Allows you to relatively reduce the current costs of the enterprise and increase the amount of profit received. The saving regime is understood not as an absolute, but as a relative reduction in current expenses;
- business reputation of the enterprise . It represents the opinion formed by consumers about the potential capabilities of the enterprise. A high business reputation allows an enterprise to receive additional profit and increase profitability.
TO main external factors, influencing the formation of profit of the enterprise, include the following:
- market volume. The retail turnover of the enterprise depends on it. The greater the market capacity, the wider the enterprise’s ability to make a profit;
- state of competition. The stronger it is, the more significant its negative impact on the amount and level of profit, since it leads to averaging of the profit rate. Competition requires certain additional costs that reduce the amount of profit received;
- the amount of prices set by suppliers of goods. In a competitive environment, price increases by suppliers do not always lead to an adequate increase in sales prices. Enterprises often strive to work less with intermediaries, to choose among suppliers those who offer goods of the same quality level, but at lower prices;
- prices for services of transport enterprises, public utilities, repair and other organizations. Increasing prices and tariffs for services increases the current costs of enterprises, reduces profits and reduces the profitability of production and trading activities;
- development of the trade union movement. Businesses are seeking to limit payroll costs. the interests of workers are expressed by trade unions, which are fighting for increased wages, which creates the preconditions for a decrease in the profit of the enterprise;
- development of the activities of public organizations of consumers of goods and services;
- state regulation of enterprises' activities . This factor is one of the main ones that determines the amount of profit and profitability.
Profit distribution – This the procedure for sending it to various funds of the enterprise, determined by law. Profit distribution is based on compliance three principles:
Ensuring the material interest of employees in achieving the highest results at the lowest cost;
Accumulation of own capital;
Fulfillment of obligations to the state budget.
In a market economy, a significant portion of profits is withdrawn in the form of taxes. Currently in Russia income tax(meaning gross taxable profit) is 24%, which the state uses to replenish budget revenues.
Withdrawal of economic sanctions provided for by law into the budget is carried out at the expense of the profit left at the disposal of the enterprise after tax has been calculated.
One of the directions of profit distribution is repayment of state targeted loan, received from a targeted extra-budgetary fund to replenish working capital, within the repayment period. Repayment of an overdue target loan and payment of interest on it is carried out at the expense of the profit remaining at the disposal of the enterprise.
The scheme for the distribution and use of profit of a trading enterprise is shown in Figure 1.
Figure 1 - Scheme of distribution and use of profits
The distribution of profit predetermines the process of its use. Target profit distribution analysis– to establish how rationally profits are distributed and used from the standpoint of self-expansion of capital and self-financing of a trading enterprise. At the same time, directions for using the profits remaining at the disposal of the enterprise must be explored.
In general, the profit remaining at the disposal of the enterprise is distributed among savings funds and consumption funds. These funds differ in their ownership and their purpose.
Savings funds combine that part of the profit remaining at the disposal of the enterprise, which is aimed at the construction and acquisition of fixed assets, that is, at the creation of new property of the enterprise.
Facilities consumption funds are intended to finance expenses for social needs and material incentives for the enterprise staff. At the expense of the funds, employees are paid bonuses not related to production results, various types of incentives, social and compensation payments, financial assistance, treatment and recreation, and the purchase of medicines.
All consumption funds, even such savings as investments in the social sphere, do not belong to equity capital.
In terms of economic content, funds are the net profit of the reporting year or previous years, distributed among funds for its intended use - for the purchase of new machinery and equipment, social activities; financial incentives and other needs.
The board of founders has the right to direct funds from funds to cover losses, redistribute funds from funds between them, and direct part of the funds to increase the authorized capital and finance other activities.
If a business makes a profit, it is considered profitable. Profitability indicators used in economic calculations characterize relative profitability. There are indicators of product profitability and enterprise profitability.
Product profitability used in three versions: profitability of products sold, commercial products and individual products:
- profitability products sold – this is the ratio of profit from the sale of products to its total cost;
- profitability commercial products characterized by the cost indicator per monetary unit (1 ruble) of commercial products or its reciprocal value;
- profitability products – This is the ratio of profit per unit of product to the cost of this product. The profit on a product is equal to the difference between its wholesale price and cost.
Profitability=(T-C) / C×100, where:
T – commercial products at wholesale prices of the enterprise;
C is the total cost of commercial products.
Enterprise profitability (overall profitability) defined as the ratio of balance sheet profit to the average cost of fixed production assets and normalized working capital.
In other words, overall profitability level reflects the profitability of the enterprise. This is a key indicator when analyzing the profitability of an enterprise, reflecting the increase in all invested capital (assets). It is equal to (%) earnings before interest divided by assets and multiplied by 100.
But if you want to more accurately determine the development of an enterprise based on the level of its overall profitability, it is necessary to additionally calculate two more indicators: profitability of turnover and the number of capital turnover.
Profitability of turnover reflects the relationship between the gross revenue (turnover) of the enterprise and its costs and is calculated using the formula:
Rho =P/V . 100,
Where Ro is the profitability of turnover
P - profit before interest
B - gross revenue
The greater the profit compared to the gross revenue of the enterprise, the greater the profitability of turnover.
The number of capital turnover reflects the ratio of the gross revenue (turnover) of an enterprise to the amount of its capital and is calculated by the formula:
H = V / A . 100,
Where H is the number of capital turnover
B - gross revenue
A - assets
The higher the gross revenue of the enterprise, the greater the number of turnover of its capital. As a result, it follows that:
Y = P . H,
Where Y is the level of overall profitability
P - profitability of turnover
N - number of capital turnover
Indicators of profitability and profitability have a general economic characteristic; they reflect the final efficiency of the enterprise and its products. The main indicator of the level of profitability stands the ratio of total profit to production assets.
There are many factors that determine the amount of profit and the level of profitability. These factors are divided into internal and external - they have already been listed above. In this regard, the tasks of economic analysis include:
§ identifying the influence of external factors;
§ determination of the amount of profit received as a result of the action of the main internal factors, reflecting the labor contribution of the enterprise’s employees and the efficiency of use of production resources.
Profitability indicators reflect the final financial result and are reflected in the balance sheet and statements of profits and losses, product sales, income and profitability.
Profitability is the result of the production process; it is formed under the influence of factors related to increasing the efficiency of using working capital, reducing costs and increasing the profitability of products and individual products. The overall profitability of an enterprise must be considered as a function of the following factors: structure and capital productivity of fixed production assets, turnover of standardized working capital, profitability of products sold.
There are two main methods for analyzing overall profitability:
By efficiency factors;
Depending on the size of profit and the size of production factors.
The final financial result of the production and financial activity of an enterprise can be either a balance sheet (total) profit or a loss (such an enterprise will become unprofitable). Total profit (loss) consists of profit (loss) from the sale of products, works and services and non-operating profits and losses.
Therefore, the objectives of cost-benefit analysis include:
Assessment of the dynamics of the profitability indicator since the beginning of the year;
Determining the degree of implementation of the plan;
Identification and assessment of factors influencing these indicators and their deviation from the plan;
Identification and study of the causes of losses and damages caused by mismanagement, management errors and other omissions in the production and economic activities of the enterprise;
Search for reserves for possible increase in profit or income of the enterprise.
Organizational finance – This is a set of monetary relations associated with the formation of primary income and savings, their distribution and use. Since the predominant part of financial resources is concentrated in enterprises, the stability of the financial system as a whole depends on the stable position of their finances.
The life of an enterprise is based on financial relations, the result of which are financial resources accumulated in various funds of the enterprise. Any enterprise can function only if it has financial resources.
In order for an enterprise to carry out its activities, it needs financial resources. Financial resources of the enterprise represent the totality of all types of funds and financial assets that an economic entity has and can dispose of. They are the result of the interaction of receipts, expenses and distribution of funds, their accumulation and use. The financial resources of an enterprise include only those funds that remain at its disposal after fulfilling all obligations for payments and contributions, deductions and financing of current expenses.
Financial resources are generated as a result of:
Production and sale of goods, works and services;
Distribution and redistribution of sales proceeds.
IN composition of financial resources (financial capital) enterprises include equity capital and borrowed funds:
- equity consists of: contributions of founders (authorized or share capital); the company's own funds accumulated (including reserve funds and special-purpose funds) and other contributions (for example, donations). Accumulative equity capital has three sources:
Profit from production and financial activities (it is accumulated in the form of reserve capital, retained earnings of the previous and reporting years and accumulation funds);
Depreciation deductions;
An increase in the value of an enterprise's fixed capital when it is revalued as a result of inflation ( Extra capital).
- borrowed funds, The main sources of which for Russian enterprises are short-term loans from banks and other commercial organizations and commercial loans issued in the form of promissory notes.
Loan is an agreement under which one party (the lender) provides the ownership of the other party (borrower) with money or other things defined by generic characteristics, and the borrower undertakes to return to the lender the same amount of money or an equal number of things of the same kind and quality received by him. In this case, the contract is considered concluded from the moment of transfer of money or other things.
Credit in economic theory means a system of economic (monetary) relations regarding the provision of temporarily free funds for use for production needs on the terms of urgency, repayment and payment.
The loan fulfills the following Features:
Provides an elastic mechanism for the flow of capital from one industry to another;
Transforms inactive money capital into active one, significantly accelerates its circulation, therefore, contributes to the growth of the mass of profit, the renewal of fixed capital, and the saving of social production costs;
Helps accelerate the concentration and centralization of capital.
LIST OF SOURCES
1. State educational standard of higher professional education. Specialty 351100 “Commodity research and examination of goods (by areas of application).” – M., 2000.
2. Pre-graduation practice. Program and guidelines for 5th year full-time students of specialty 351100 “Commodity research and examination of goods (in the field of production and circulation of agricultural raw materials and food products)” / Comp. Donskova L.A., Gayanova M.Sh. Ekaterinburg: USUE.- 2004.-20 p.
3. Kartashova V.N. Prikhodko A.V. Economics of an organization (enterprise). – M.: Prior-izdat, 2004.-160 p.
The amount of profit received from the sale of a certain type of product affects the profitability of the enterprise and the turnover of its assets.
Sales profit as an indicator
The profit that goes to the enterprise budget from the sale of a particular product is an indicator that demonstrates the quality of the company’s performance. In order for a company to operate calmly and confidently, the level of profit must be above average, since low income will significantly impede the development of business and reduce the motivation of employees.The performance of the company is assessed by comparing the profit indicators received in the reporting period and the income of previous periods. If the dynamics are positive, then the company is operating efficiently. If it is negative, then on the contrary - the company’s losses become greater than the revenue necessary to obtain “net” profit.
To calculate profit from sales, a special formula is used, implying the difference between gross income and financial costs incurred as a result of the sale of goods
Factors that determine sales profit
The amount of profit from sales is formed taking into account the following factors:- administrative expenses;
- expenses incurred in the process of selling products;
- cost of goods sold;
- commodity prices;
- volume of sales.
Another factor influencing profit growth is a reduction in production costs. The lower the cost, the higher the financial income. This dependence is most typical of administrative and commercial costs. Also, the sales process is influenced by changes in commodity prices - the higher the price, the higher the profit and vice versa.
Businessmen are able to influence all of the above factors if the situation requires it. As for factor analysis, it allows you to quickly make high-quality management decisions.
Factors that depend on the current state of affairs on the market are beyond the jurisdiction of the company. These factors are generally considered to include:
- deductions for depreciation;
- cost of production raw materials;
- market conditions;
- climatic factors;
- public policy.
Calculation of profit from sales
When drawing up a business plan for a company, it is imperative to take into account sales profit indicators. It’s not difficult to make a forecast - you just need to study the most popular types of goods among buyers and determine the planned sales volumes.Currently, for reliable forecasting, various programs are used that take into account all factors affecting sales profits. If you need to obtain the most correct information, it is recommended to take a larger time period of the enterprise’s activities in order to cover as much information data as possible. The main thing is not to forget about inflation and market conditions.
The ability to calculate profitability is considered an integral part of successful management in any type of business. It is not difficult to perform such an operation and any manager can cope with the calculations. Temporary losses will be insignificant, and the result will exceed any expectations - profits will increase and the company will work more efficiently.
The largest item in the formation of net profit, as a rule, is profit from sales of goods, products, works, and services. Therefore, during the analysis process, it is important to assess the influence of the factors that caused the change in this indicator.
In general, the following main factors influence sales profit:
· sales volume (the more an organization sells profitable products, the more profit it makes);
· sales structure (certain types of products sold, works, services have different profitability. Some of them may turn out to be unprofitable for the enterprise. Therefore, the amount of profit of the organization largely depends on the range of products sold);
· prices for products, works and services sold (increasing them allows the enterprise to gain additional profit. However, changing this factor has limitations in conditions of high competition, since sellers base their pricing policy not so much on the level of profitability acceptable to them, but on the average level prices for similar goods, works, services);
· the level of costs included in the cost of production (their increase leads to a decrease in profit in the same amount).
To assess the influence of these factors, in addition to the information from the Profit and Loss Statement, data from a special calculation is used, as a result of which the natural sales volumes of the reporting period are recalculated into average prices and costs of the previous period (Table 3.3).
Methodology for factor analysis of sales profit includes the following calculations:
P = P 1 – P 0,
where P 1 is the profit of the reporting year, thousand rubles; P 0 – profit of the previous year, thousand rubles;
2) calculation of the impact on profit of changes in sales volume (P 1):
where is the percentage increase in sales volume calculated by the formula:
Here – revenue from sales of the reporting period in prices of the previous period; – revenue from sales of the previous period;
1) calculation of the impact on profit of changes in selling prices for products sold (P 2):
where is revenue from sales of the reporting period;
2) calculation of the impact on profit of changes in product costs (P 3):
where is the total cost of products sold for the reporting period at prices and conditions of the previous period; – the total cost of products sold during the reporting period. Such a calculation can be carried out not only as a whole for the total amount of expenses for the production and sale of products, works, services, but also to evaluate the impact of production, management and commercial expenses separately;
3) calculation of the impact on profit of changes in the sales structure (P 4). To do this, the influence of the three previous factors is subtracted from the total change in profit (P) (balance method):
P 4 = P – P 1 – P 2 – P 3;
4) calculation of the total influence of factors equal to the total change in profit from sales (P):
P = P 1 – P 0 = P 1 + P 2 + P 3 + P 4.
Table 3.3
Initial data for analyzing profits from sales of products, works, services
|
Indicator name |
Indicator value, thousand rubles |
||
|
to previous (base) year |
based on the actual sales volume of the reporting year |
for the reporting year |
|
|
Revenue (net) from the sale of goods, products, works, services |
|||
|
Cost of goods, products, works, services sold |
|||
|
Business expenses |
|||
|
Administrative expenses |
|||
|
Full cost of goods, works, services sold |
|||
|
Profit (loss) from sales |
|||
Factor analysis allows us to identify reserves for increasing sales profits through:
· cost reduction;
· optimization of the structure (assortment) of sales;
· development of a flexible pricing policy;
· searching for new markets;
· improving the quality of products, works, services.
According to the table. 3.3 we get the following results:
1) calculation of the total change in profit from sales (P):
P = 2585 – 5328 = -2743 thousand rubles;
2) calculation of the impact on profit of changes in sales volume (ΔP 1):
%,
thousand rubles;
1) calculation of the impact on profit of changes in selling prices for products sold (P 2):
R 3 KR = 4710 – 6316 = -1606 thousand rubles;
5.3) calculation of the impact on profit of changes in management expenses (P 3 level):
R 3 level = 656 – 915 = -259 thousand rubles;
3) calculation of the impact on profit of changes in the sales structure (P 4):
R 4 = -2743+1376-9823+9500 = -1690 thousand rubles;
1) calculation of the total influence of factors equal to the total change in sales profit (P):
R = -1376 + 9823 – 9500 – 1690 = -2743 thousand rubles..
The results of factor analysis allow us to see that in the reporting year, compared to the previous year, sales profit decreased by 2,743 thousand rubles. This was facilitated, first of all, by a decrease in sales volumes of manufactured products and a deterioration in their structure. The impact of these factors on profit was -1,376 and -1,690 thousand rubles. respectively. However, the decisive factor in increasing the financial result from ordinary activities was the increase in prices for products sold in the reporting year, due to which profit increased by 9,823 thousand rubles. At the same time, the organization has reserves to increase profits by reducing all types of costs (production, commercial and administrative).
As already noted, sales profit reflects the overall financial result of the various types (operating segments) of the organization's ordinary activities. Based on the requirements of materiality, completeness and others for accounting, it is recommended that in the Profit and Loss Statement, sales revenue and the cost of goods, products, works, services sold should be reflected in detail - highlighting the value of these indicators in the context of individual types of activities (for example, production products, performance of work (construction, research), provision of services (transport), rental of fixed assets). This allows the analysis process to identify the impact of the results of the activities of each segment in the form of gross profit on sales on the overall profit from sales.
French-style meat in the oven: Delicious classic recipes
Lecho made from bell peppers with tomato paste for the winter - you'll lick your fingers
Delicious lecho for the winter, proven recipe
Lecho of tomatoes and peppers for the winter
Lula kebab recipe on the grill