The added value of products is a value that reflects the contribution of an enterprise to the goods it sells. In other words, these are all costs incurred by the organization in the production of goods, minus the cost of goods and services purchased from suppliers. The formula for calculating value added suggests several options for calculating it, depending on the information you have.
It is necessary
- - calculator;
- - information about the income and expenses of the enterprise.
Instructions
Step 1
If you know the amount of the company's gross profit (BB), the amount of material costs for the production of products (M) and the amount of depreciation deductions (A), calculate the added value (DS) using the formula DS = BB - (M + A).
Step 2
Material costs for the production of products (M) include raw materials, materials, fuel, electricity and general production costs for the repair and maintenance of equipment.
Step 3
The volume of the company's gross revenue (BB) is equal to the sum of the cost of production and the company's profit before tax (SB + P). Therefore, if you have this data, you can calculate the added value using the formula DS = (SB + P) - (M + A).
Step 4
The cost of production (SB) is equal to the sum of all material costs (M), wages, taking into account charges to social funds (WF), depreciation charges (A) and other overhead costs, for example, rent or advertising (PR). Interest charges on loans and borrowings (%) can also be included in the cost of production.
Step 5
Expand the formula indicated in the second paragraph: DS = (M + ZP + A + PR +% + P) - (M + A), that is, DS = (ZP + P + PR +%). Thus, you can determine the added value by simply adding the accrued wages, the company's profit before tax and the interest paid on the loan. If the organization incurs the costs of renting the premises, be sure to include them in the added value.
Step 6
The company's profit before tax (P) is equal to the difference between the company's gross revenue and the cost of production, P = (BB - SB).
