Profitability indicators occupy one of the main places in the analysis of the financial and economic activities of the enterprise. Profitability implies such a use of funds by an enterprise in which it not only covers its costs, but also makes a profit.
Instructions
Step 1
When analyzing the profitability of an enterprise, several indicators are calculated. Return on assets is the profit earned by the organization relative to the average annual value of assets in percentage terms. This indicator makes it possible to estimate how much profit was received for each ruble of assets advanced into production.
Step 2
Return on investment, or return on invested capital, allows you to determine how effectively the funds invested in the development of a given firm were used. This indicator is calculated as the difference between the ratio of profit before tax to the balance sheet currency (in percentage terms) and the amount of short-term liabilities.
Step 3
More often than others, when analyzing the activities of an enterprise, the indicator of profitability of products is used. It is defined as the ratio of the organization's profit remaining at its disposal and the total cost of goods sold. The profitability of products shows how many kopecks of profit the company will receive for each ruble of the invested costs. This indicator can be calculated both for the organization as a whole, and for its divisions, as well as for individual types of products. This ratio depends on changes in the structure of products sold, their cost and the level of selling prices.
Step 4
Another common indicator of profitability is the return on sales. It is calculated as the ratio of profit from product sales to sales proceeds. Its other name is the rate of profitability. Return on sales shows how much profit is accounted for in total revenue. If at an enterprise this indicator is decreasing in dynamics, then this indicates a decrease in demand for its products and a decrease in competitiveness in the market.
