One of the key indicators of the company's success is the profitability of its activities. This concept means a relative indicator of economic efficiency. Comprehensively, it reflects the degree of efficiency in the use of monetary, labor and material resources. The profitability ratio is calculated as the ratio of income to assets and resources that form it.
It is necessary
relation of income and expenses
Instructions
Step 1
The profitability of production activities is determined by the ratio of the profit from sales minus depreciation for the reporting period and the costs for selling products, and also shows how much the company receives from each ruble spent on the production and sale of products.
Step 2
It can be calculated both for the enterprise as a whole and for individual segments of its products. The profitability of products more accurately reflects the results of the company's activities, since it takes into account not only the net profit, but also the entire volume of earned funds that came from the turnover.
Step 3
The equation for calculating the profitability of products looks like this: the profit figures are divided by the sales figures and multiplied by 100. Thus, you get its level. Indicators are determined as a percentage.
Step 4
For a deeper study of the level of profitability, it is necessary to study in detail the reasons for price changes, the cost of a unit of production and their impact on profitability itself. It is customary to carry out such calculations for each type of product.
Step 5
Since the financial result of the company's activities is the difference between the amounts of its income and expenses, therefore, to determine it, you need to correlate income and expenses for a certain reporting period. But since all income and expenses can relate to different reporting periods, it makes sense to divide them according to the time component. This is ensured by the right of capitalization.
Step 6
In this case, the financial result is reduced or increased by those expenses that relate to this period. That is, the company's expenses are written off in the period when they bring income to the company. If they bring a loss, the unprofitability of the enterprise becomes obvious. All these expenses and income are shown in the balance sheet.
