The profit of an enterprise is determined by income and expenses. To improve this indicator, it is necessary to conduct a financial analysis of the company's activities and choose the optimal method of increasing. For this, the estimated estimated profit is compared depending on changes in various parameters.
Instructions
Step 1
Draw up the balance sheet and profit and loss statement of the company for the reporting period. Based on these documents, it is necessary to develop a table that will allow you to simulate the receipt of profit when various items of income and expenses change. To do this, you can use a text editor Excel.
Step 2
Analyze all the items of expenses and income of the enterprise. It is necessary to separately highlight those moments on the change of which you are not able to influence. For example, utility bills. Make a list of measures to increase profits and individually enter them in the developed table, recording their impact on income growth.
Step 3
Formulate a clear business strategy. This must be done if the financial analysis shows that the company spends money inappropriately and receives less than it could have been. Analyze the points that need to be corrected. Optimize production and delivery, train employees, and improve customer service.
Step 4
Reduce costs to increase profits. In this case, first it is necessary to determine those costs that are unnecessary. If the wages are higher than those established at similar enterprises or in the region, then it must be reduced. Sometimes it happens that there are more workers in production than is necessary. In this case, you can reduce the staff or send free people to other facilities.
Step 5
Analyze the income of the enterprise. If your prices are higher than your competitors, but the profit is lower, then it makes sense to lower the cost of goods in order to attract more potential customers. Increasing prices should be done only if you have regular customers and you own a large enough market share. Otherwise, it can lead to loss of profit.
