The key goal of each enterprise is to extract the maximum possible profit with minimal production costs.

Depending on the calculation method used, profitability is divided into several categories. The most significant coefficient in the business world is income from the sale of manufactured products or services.

Each company, in the course of its activities, is looking for new and unexplored ways to achieve the maximum level of profitability. But in order to realize this, it is necessary first of all to understand how profit is formed, how it is calculated, what situations can influence it, in terms of volumes.

Scope of application

Sales profit is the final indicator of a company's trading activities.

The company's management should strive to ensure that the final result of the activity, although not the maximum level of profit, is sufficient for further continuation of work under normal conditions.

Information sources for profit analysis:

• Profits and Losses Report;
• enterprise balance sheet (accounting);
• financial plan of the company.

The profit indicator itself is not capable of giving a deep assessment of the situation, because it is nothing more than a figure expressed in value.

For example, for the audit the company received an income of about 200 thousand rubles. How good or bad is this indicator?

It is difficult to give an exhaustive answer to such a question with only a figure of 200,000 rubles. One solution may be to compare the company's performance with its previous reporting periods.

For example, last year, as a result of its business activities, the company gained 150 thousand rubles. Consequently, the profit indicator increased by fifty thousand rubles, or thirty-three percent. Answering the previously posed question, the company was able to show more effective results during the past audit.

What other calculations need to be made to track the activities of the enterprise? , read carefully.

Where to invest money today? Read about the most profitable options.

A business plan is a necessary project before starting your own business. Here we will go through step by step all the sections that need to be included in your planning.

In the process of calculating business profits, a formula is used in which the coefficient acts as the difference between expenses and gross profit.

Gross profit from sales is the difference between expenses (required to sell and create products) and flow revenue.

The cost of sales includes only those expense lines aimed at the direct sale of the manufactured product or service offered.

1. Profit from sales of products – formula: Prpr = Vpr – UR – KR. Where, KR, UR – commercial and managerial waste; Vpr – level of gross profit; Prpr – income from the activities of the company.
2. Formula for calculating a company's gross profit: Vpr = VO – Sbst. Where, Cbst is the cost of selling products; In – volume of revenue.

An example of using the sales profit formula

The company sells household appliances. Over the past reporting period, two thousand vacuum cleaners were sold at an average price of five thousand rubles. Revenue for the last audit is:

In = 2000 * 5000 = 10,000,000 rubles.

The cost level of one vacuum cleaner is three thousand three hundred rubles, and all products:

Cost = 2000 * 3300 = 6,600,000 rubles.

Administrative and commercial waste amount to 1,450,500 and 840,500 rubles, respectively.

Let's determine the level of gross profit:

Prv = 10,000,000 – 6,600,000 = 3,400,000 rubles.

Let's calculate the profit from the sale of vacuum cleaners:

Prpr = 3,400,000 – 840,500 – 1,450,500 = 1,109,000 rubles.

If you subtract all other expense lines and tax deductions from the profit indicator, you get net income.

What influences the volume of goods sold?

There are two key categories that influence a company's profit: external and internal.

• Level of sales of goods. If the sales volume of goods with a high profitability indicator increases, the profit indicator will increase. If you increase sales of goods with low profitability, the profit margin will decrease.
• Structure of the offered range of goods. The thread of dependence is the same as in the case of volume;
• The cost of goods or services offered. Directly proportional dependence. If the cost of the goods offered increases, profits increase, and vice versa.
• Cost price. In the process of increasing the level of cost of goods, profit falls, and when the level of cost decreases, it increases.
• Business expenses. The thread of dependence is exactly the same as in the case of cost.

It is worth noting that each enterprise has a full range of tools aimed at the continuous regulation of the above factors.

External reasons include the state of the market conditions in which the sale of a service/product occurs. No enterprise in the world is capable of significantly influencing such factors.

External reasons include:

1. The indicator of deductions for depreciation.
2. Government regulation.
3. Natural conditions and situations.
4. The level of difference between supply and demand (market sentiment).
5. The initial price of raw materials and materials necessary for the production of a product for its subsequent sale on the market.

External factors do not have a direct impact on the profitability of the enterprise, but they can put pressure on the cost, as well as the final volume of goods sold.

Ways to increase profit ratio

In light of the market economy, companies have two effective ways to increase their profit levels.

In particular:

• Reducing the cost level of a service/product (in the process of creation and subsequent sale).
• Increasing sales volumes of manufactured products.
• Diversification of the production process.
• Entering new markets.
• Elimination of losses and non-production expenses.
• Optimizing the consumption of economic resources.

The level of income a company receives directly depends on the volume of goods sold, so many managers favor the idea of ​​simply increasing volumes. To effectively implement such an approach, it is necessary to conduct the highest quality analysis possible, determine which products are most in demand among end consumers, and, more importantly, how beneficial they are for the company itself.

If a product has a high profitability rate, but there is low demand, it is necessary to conduct a marketing campaign in order to stimulate growth in demand.

It is important to find the target audience, change a number of product characteristics, and design solutions.

The more consumers you can attract to your product, the higher the final profit will be.

Another effective way, as mentioned above, is to reduce production costs. To implement this plan, it is necessary to find suppliers with lower price thresholds in matters of primary raw materials and materials.

Other, no less effective ways to increase a company’s profitability are the automation of the production process, the introduction of new technologies, and innovative solutions.

Calculation of profit from the sale of goods: methodology

In the process of planning a development strategy, companies are required to take into account the expected level of profit.

To accurately calculate future profits, it is important to know at what price it will be sold to the end consumer and how much volume will be sold.

The easiest way to predict the level of future profit is to calculate the profitability ratio (data for the past time interval is used).

1. Calculation of return on sales based on net profit (ROM): ROM = (income from the sale of goods / cost * 100 percent.
2. Profit before tax - formula: income from goods sold + income/expenses (operating) + income and expenses (non-operating).
3. They often resort to factor analysis of sales profits. Calculation formula: P = K*(C – C). Where, K – volume of goods sold; C – cost of production; C – cost of production, with subsequent sale of the service/product.

Also, today there is a wide list of various financial and analytical programs available that allow you to make a high-quality forecast, taking into account all known factors. The best approach to profit planning is achieved with a long-term time horizon.

Conclusion

Calculation and analysis of the company's profitability level is a key element of business management. In small companies, such work does not take much money and time, and the simplest calculation of the company’s profit can be carried out by the manager himself. But with a scrupulous approach, positive changes will manifest themselves immediately, in the form of increased income and efficiency levels.

Video on the topic

Let's say there are raw materials, the finished product is made from it. The cost of raw materials, work, and other processes is 8,000 rubles, and the sold product costs 48,000 rubles. It turns out that the cost of the product is 8,000 rubles, it is sold for 48,000 rubles, the net profit is 40,000 rubles. How to calculate the profitability of the entire production as a percentage? And how to calculate the profitability of sales?

To avoid confusion, you need to separate income from profit. In this example, income is 48,000. We subtract the cost of 8,000 from the income of 48,000 and get a profit of 40,000. To determine profitability, divide the profit by the cost and multiply by 100, we get a profitability of 500. In this example, the profitability of production is 500 percent, but this is somewhere overseas. You need to incur business expenses, pay for delivery, other services, and the profitability may turn out to be much less. Some novice merchants are very surprised when customs does not allow their cheap goods to pass through, since they are too cheap and they take payments not according to the actual cost, but according to the cost of the goods from reference books, and the planned profitability drops significantly.

Dear commentators and the author of the question! But the question is tricky. The commentators drew the correct formulas. But, let's go down to the sinful earth and take a look at two documents - the balance sheet of the enterprise and the statement of financial results. And what do we see there? And the income tax base (in the report) does not at all correspond to the amount of money in the account (the active part of the balance sheet). And, as a rule, the income tax base is much greater than the money in the account. But the money to pay the tax is withdrawn from the company’s account, which reflects the availability of money, but not from the account where the accountant entered the result of the activity. So what is the amount that should be considered profit? As soon as you understand this problem, then you can move on to calculating the profitability value. So think about it!

“Physical9 meaning of PROFITABILITY of a product: how many rubles of profit does each ruble of funds invested in the production and sale of this product bring.

In this case, P = [(48000 - 8000) / 8000] x100% = 500%

Everything here is quite simple if you consider the profitability of products, this is the ratio of profit to cost and express it as a percentage, multiply by 100%, and in this case 40000/8000*100%=500%, i.e. for every ruble invested in production it turns out 5 rubles. The figure is more than worthy.

Profitability of products sold:

ROM = (profit from sales of products, works, services/Cost of products sold) * 100%

Return on sales (Margin on sales, Return on sales) is the ratio of a company’s operating profit (profit from sales, EBIT) to its revenue (Sales).

ROS = EBIT/SALES = operating profit/Revenue × 100%

How to calculate interest on a deposit - the formula for calculating income for replenished, non-replenished and with capitalization

Happy holders of their own bank deposits could earn more on a bank investment if they did not neglect publicly available information on how to calculate interest on a deposit. After assessing the main parameter - the interest rate, you need to pay attention to other conditions on which capitalization depends. To do this, you need to understand the difference between simple percentages and complex ones and, using specific examples, familiarize yourself with the calculation of the income amount for various types of savings.

According to the classic definition of finance, interest is understood as profit (remuneration) accrued and paid to the investor for the use of his funds.

The purposes of use may be investments or any other activity involving the temporary alienation of these funds in favor of an interested party. Credit institutions make accruals in accordance with concluded agreements, using simple and complex calculation methods.

With simple accrual, the profitability of the deposit is determined by calculating percentages at a time for the entire account period or regularly at intervals, for example, once a month. The amount of monthly profit made according to this accrual scheme is accumulated in a special account, separate from the main body of the deposit without return. Simple % can be withdrawn at the end of each contract period.

When calculating compound interest when opening deposits, the investor's profit is formed by calculating interest on the amount increased by adding to the current deposit body the interest yield of the previous period (frequency of capitalization). At a fixed rate, compound interest is more profitable for the investor than simple interest. The disadvantage is that banks use restrictions in the deposit agreement when making withdrawals. This carries risks. For example, while the client is waiting for the end of the contract, a surge in inflation can eat up the entire return on a deposit of any size.

How to calculate interest on a deposit using a simple formula

If you have an urgent need to manage your funds by opening an investment at simple interest, then it is best to calculate the profitability yourself according to the formula for calculating simple interest. In practice, you may encounter two types of bank savings based on replenishment: replenishable and non-replenishable by balance. How to calculate the numbers for each type is described below.

• With payment of simple interest at the end of the contract term
• S = (P x I x (T / K))/100;
• S – profit margin;
• P – investment size;
• indicator I – annual rate;
• K – number of days in the current year;
• Suppose a citizen decides to invest money for 180 days at an annual interest rate of 12%, the savings amount is 100,000 rubles, according to the above formula, the return can be calculated as follows: (100,000*12* (180/365))/100 = 5,916 rubles.

Calculation of deposit with capitalization

Sometimes circumstances allow you to receive additional money that you would like to save and increase in a bank deposit. There is no need to open a new separate account. If there is an appropriate clause in the agreement, you can add money to the existing deposit. To check the correctness of the accrual with replenishment, use the formula that will help calculate the amount of the deposit with capitalization:

• S = ((P x I x (T / K))/100) + ((P 1 x I x (T 1 / K))/100);
• where the first and each subsequent component differ from each other by the variables P and T (the size and period of placement of the main body of the account).

Suppose a citizen invested money for 60 days at 12% per annum with the possibility of replenishment. The initial amount is 50,000 rubles. On the 20th day, the citizen tops up the account with 10,000 rubles. It turns out that 50,000 rubles were on deposit for 19 days (T). Starting from the 20th to the 60th day (20 days, T1), the body of the account amounted to 60,000 rubles. Interest on the deposit must be calculated as follows: ((50,000*12*(19/365))/100+((60,000*12*(20/365))/100 = 312.33+394.52=706.85 rubles

How to calculate income on a deposit with interest capitalization

Those who have come across microcredit organizations (MFOs) in their lives know that these creditors like to charge their debtors every day with interest on the balance, which inflates the amount of debt. A simple bank depositor cannot count on the same returns, but the profit from the bank's accrual of the amount to which the value of interest for the previous period (capitalization) is added is of particular interest. It is better to calculate the interest on the deposit amount yourself. This requires mastery of complex calculation formulas.

When assessing the offer of a credit institution and the size of the loan, which implies a non-replenishable account with monthly capitalization of interest, it is necessary to use the compound interest algorithm. If MFOs set a frequency of once a day, then banks start with three months and less often with one. If capitalization is carried out every quarter or month, profitability increases more significantly. Interest on deposits made at compound interest is calculated using the basic formula:

• S = (P x I x (G / K))/100;
• S – profit amount;
• S – profit margin;
• I – annual interest rate;
• G – period after which capital is replenished;
• K – number of days in the current year.

Next, the resulting amount of profitability is added to the original body of the deposit, and the resulting figure is put into circulation again. For example, a citizen invested 100,000 rubles for a period of 90 days at 10% per year. Capitalization period is 30 days. The calculation of annual interest on deposits in rubles will be as follows:

1. The first month of interest accrual when the deposit is opened: (100,000*10*(30/365))/100=822.
2. Second month: ((100,000+822)*10*(30/365))/100=829.
3. Third month: ((100 822+829)*10*(30/365))/100=835.

Deposit with replenishment during the term of the agreement

An investment agreement with replenishment implies that after each separate period a certain amount of funds is added to the initial investment. The partial complexity of the formula for calculating income led to the development of special online deposit calculators for the profitability of replenished savings. If it is important for you to know how to calculate income, then check out the formula:

• S = P additional*M / I*((1+I / M) M*n-1)+P*(1+ I / M) M*n;
• S – amount of income;
• P – initial amount of bank deposit;
• P add. – replenishment amount;
• I – annual interest rate (in hundredths, that is, it must be divided by 100);
• M – number of capitalization periods;
• n – deposit term (number of years);
• Suppose a citizen deposits 100,000 rubles in the bank for one year. at 12%, he can afford to replenish his savings by 4000 monthly; upon expiration of the contract, the bank will have to return the amount: 4000*12/0.12*((1+0.12/12)12*1-1)+100000 *(1+012/12)12*1=163,412.52 rubles.

How to calculate deposit income taking into account the effective rate

Often, when assessing the profitability of savings, people pay attention to just one parameter - the advertised interest rate, written in huge font. At best, some citizens have an understanding that % can be added to the balance and create a more effective accumulation than when accrued over the entire period. This is a superficial understanding that leads to an underestimation of one's benefits.

What is the effective deposit rate

This term is used by financial market professionals who understand that a bank attracts a client not only with one figure of the nominal interest rate, but also with the possibility of capitalization of interest, as well as bonuses for fulfilling conditions. The total high interest income, taking into account all the nuances, is called the effective rate. This parameter differs from the nominal rate specified in the contract. With a regular investment, the interest can be mechanically calculated, accrued and withdrawn at the end of the contract period.

A good general idea of ​​how to calculate the effective interest rate can be obtained by analyzing the following calculation formula taking into account capitalization:

• calculate the effective rate = ((1+(nominal rate/12) T-1)*12 / T;
• T – number of months of investment;
• for example, a citizen wants to place an investment for a period of two years with the condition of monthly capitalization, at a nominal rate &%;
• The effective rate is: ((1+9%/12)24-1)*12/24)*100 = 9.82%.

Which deposits are taxable?

The method of calculating income tax on a deposit in rubles occurs if the interest rate exceeds the Central Bank refinancing rate by 10%. It is equal to 8.25, plus 10% will be 18.25%. If your investment earns more, you will have to pay tax. If the client has foreign currency savings, the tax is deducted at 9%, residents (35%) and non-residents (30%) are taxed. Money is paid only from the difference - if the rate is 20% per annum, then the tax will be calculated from 1.75%. There is no need to calculate the amount and fill out a declaration; the bank itself will deduct the money when paying income.

Instructions

Divide the trade markup by the sum of the number one hundred with the value that is equal to the dividend. Next, multiply the total turnover by the resulting number divided by one hundred. This method is appropriate if the percentage is the same for the entire assortment. It is better to repeat the calculations several times for possible errors.

Add together the products of different turnovers and the estimated trade markup for groups of goods. Next, divide the result by one hundred. This will be successfully applied if different groups of goods are assigned different percentages for the markup.

Multiply the average percentage of gross income by turnover, and then divide by one hundred. This is the simplest markup that is applied when accounting for goods at sales prices. This method also involves calculating the average percentage of gross income. Add up the trade markup for the balance of products at the beginning of the reporting period and for the goods received during this time. From the result, subtract retired or unusable goods. Next, divide this number by the amount of turnover and the end of the reporting period, multiplied by one hundred. Substitute the result into the first formula and calculate using the sample. Gross profit percentage is ready.

Add the trade markup on the balance of goods at the beginning of the reporting period with the trade markup received for the reporting period. Next, subtract the allowance for retired goods from the resulting number. From the result of the two previous actions, you now need to subtract the markup for the balance at the end of the working period. This method is suitable for calculating gross income based on the assortment of the remainder. But for implementation it is necessary to keep strict records of the markup for each product. Such accounting must be carried out periodically at least once a year.

Sources:

• profit as a percentage

Instructions

Determine the amount of gross income - the total revenue from the sale of goods or services. Find the amount of net income - the total revenue from the sale of goods or services minus the cost of returned goods (services) and discounts provided to customers. Calculate the total costs of producing goods and providing services included in the cost of production. Find the enterprise ratio, which is the difference between net sales income and the cost of goods sold or services provided. The formula for gross profit is the difference between net income and cost of production.

Determine the net profit indicator. To do this, taxes, fines, penalties, interest on loans, and operating expenses must be subtracted from the gross profit. The latter include the costs of finding partners, concluding deals, costs for employees, and costs caused by force majeure situations. The net profit indicator precisely reflects the final result of the company’s activities and shows how profitable it is to carry out this type of activity. Net profit is used by entrepreneurs to increase working capital, form various funds and reserves, as well as for reinvestment in. The volume of net profit directly depends on the size of gross profit, as well as on the amount of tax payments. If the company is a joint stock company, dividends to the company's shareholders are calculated based on the amount of net profit.

Among the main functions of profit, one can highlight stimulating. It is the main source of cash injections, and the company benefits from maximizing it. This will have a positive impact on the growth of the enterprise’s wages, and on the rate of renewal of fixed assets and the introduction of the latest technologies. As a result, production increases. The level of profit is important not only for the company itself, but also for the industry and the state. Thanks to the profits of companies, budgets of different levels are formed. Taxes received by the budget are paid from it. In market relations, profit has an evaluative function. Its level affects the value of the company and its competitiveness within the industry. The control function of profit is also distinguished. Lack of profit means the company is unprofitable. As you can see, it is very important to focus on the profit margin, which means that its formula is simply necessary to know to analyze business activities.

In addition to the general profit indicator, there are several types of profit. For example, according to the sources of formation, there is profit from sales (the cost of production must be subtracted from revenue), from operations with securities (positive between income and expenses from operations on the sale of securities), non-operating (the amount of profit from the sale of goods, the sale of property and results of non-operating operations), from investment and financial activities. To find the profit from investment activities, you need to subtract the costs of implementing the investment project from the amount of net cash flow for the investment project. Profit from financing activities is the sum of profit from sales, interest receivable and income from participation in other companies minus interest payable and operating expenses.

According to the calculation method that is practiced at a particular enterprise, one can distinguish marginal, net and gross profit. To find marginal profit, you need to subtract variable costs from income. Depending on how you pay taxes, there are taxable and non-taxable profits. Taxable profit is income minus income from which payments to the budget are not deducted. To calculate it, you need to subtract tax from the balance sheet income, profit on additional tax obligations and income focused on operations on benefits. In economic analysis, indicators such as profit of the past, reporting, planning period, nominal and real profit are used. Nominal profit is the profit that appears in the financial statements and corresponds to the balance sheet profit. Real profit is nominal profit, adjusted for inflation, correlated with the consumer price index. Also, financiers use the concepts of capitalized (aimed at increasing equity capital) and retained earnings, which is the final financial result minus taxes and other liabilities.

Not only external factors can influence the level of profit. The enterprise must take measures for its growth. For example, you can optimize inventory and warehouse balances, analyze the assortment of manufactured products, identify products for which there is no demand, and remove them from inventory. A more effective management system also contributes to profit growth. Other measures include automation of production to reduce labor costs and the use of waste-free production.

Interest The deposit rate is one of the indicators of profitability. Therefore, if you keep money in a bank, you need to be able to calculate compound ones, that is, when interest is added to the deposit amount and then also participates in the calculation.

You will need

• calculator

Instructions

To calculate compound interest, use the following formula summa=s×(1+p/100)^n, where summa is the final profit, s is the initial deposit amount, p is the annual, that is, the interest rate, n is the number of years, months, days (period). For example, let’s say you opened a deposit and deposited 10,000 rubles into your account. at 5% per annum for 3 years. To find out what amount will be in your account at the end of the term, use the above formula, that is, summa=10000×(1+5/100)^3=11576.25 rubles. Then your profit after 3 years will be equal to 11576.25−10000=1576.25 rubles.

Use the following formula for calculating compound interest for different interest periods: summa=s×(1+(p/100)×(g/y))^n, where g is the number of days, the period after which capitalization is carried out, that is, interest accrual, thus, g=30 if interest is compounded monthly, and g=90 if interest is capitalized quarterly, y is the number of days in a year (365 or 366 days).

FV=CFo×(1+n×r) ,

where FV is the future value of funds,

r – interest rate,

n – accrual period.

In the case when the duration of the loan operation is less than a calendar year, the following formula is used for calculation:

FV=CFo×(1+t/T×r),

where t is the duration of the operation in days,

T – total number of days in a year

Compound Interest Calculation

When using a compound rate, the annual income in each period is calculated not from the original deposit amount, but from the total accumulated amount, which also includes previously accrued interest. Thus, as interest accrues, interest is capitalized.

Suppose a depositor places 1000 rubles on deposit in a bank at 6% per annum. Determine what the amount will be for two years if interest is calculated according to a complex scheme

Interest income = interest rate × initial investment = 1000 × 0.06 = 60 rubles

Thus, by the end of the 1st year the amount will be accumulated on the deposit:

FV1=1000+60=1060 rubles=1000×(1+0.06)

If you do not withdraw money from the account, but leave it until next year, then at the end of the 2nd year the following amount will be accumulated in the account:

FV2=FV1 ×(1+r)=CVo×(1+r)×(1+r)=CVo×(1+r)^2 =1060×(1+0.06)=1000×(1+0 .06)×(1+0.06)=1123.6 rubles

To calculate compound interest, the following formula is used:

FVn=CVo×FVIF(r,n)=CVo×(1+r)^n

The compound interest multiplier FVIF (r,n) shows what one monetary unit will be equal to after n periods at a certain interest rate r.

In practice, very often, to make a preliminary assessment of the effectiveness of the interest rate, the period of time required to double the initial deposit is calculated. The number of periods in which the original amount will approximately double is 72/r. For example, at an interest rate of 9% per annum, the initial capital will double in approximately 8 years.

Comparison of simple and complex interest calculation schemes

To compare different interest calculation schemes, it is necessary to see how the accrual multipliers change for different values ​​of the indicator n.

If n = 1, then (1+n×r) = (1+r)^n.

If n > 1, then (1+n×r)< (1+r)^n .

If 0< n <1, то (1+n×r) >(1+r)^n .

Thus, if the loan term is less than 1 year, then it is beneficial for the lender to use the simple interest scheme. If the interest accrual period is 1 year, then the results for both schemes will be the same.

Special cases of interest calculation

In modern banking practice, sometimes there are contacts that are concluded for a period that differs from a whole number of years. In this case, two charging options can be used:

1) according to the compound interest scheme

FVn=CFo×(1+r)^w+f;

2) according to a mixed scheme

FVn=CFo×(1+r)^w×(1+f×r),

where w is an integer number of years,

f – fractional part of the year.

Suppose a depositor places 40,000 rubles on deposit for a period of 2 years 6 months at 10% per annum, interest is accrued annually. How much will the depositor receive if the bank charges interest according to a complex or mixed scheme.

1) Calculation using a complex accrual scheme:

40000×(1+0.1)^2.5=50762, 3 rub.

2) Calculation using a mixed accrual scheme:

40000×(1+0.1)^2×(1+0.5×0.1)=50820 rub.

For some deposits, interest accrues more often than once a year. In such cases, the following formula applies:

FVn=CFo ×(1+r/m)^m×n ,

where m is the number of accruals per year.

Determine the future value of 7,000 rubles invested for 3 years at 7% per annum if interest is calculated quarterly?

FV3=7000 ×(1+0.07/4)^3×4 = 8620.1 rub.

Please note that when concluding a deposit agreement with a bank, you must remember that most often the terms “simple” or “compound” interest are not used in documents. To indicate a simple accrual scheme, the agreement may include the phrase “interest on the deposit is accrued at the end of the term.” And when using a complex scheme, the contract may indicate that interest is accrued once a year, quarterly or month.

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Net profit is the part of the enterprise's balance sheet profit that remains at its disposal after paying taxes, fees, deductions and other obligatory payments to the budget. Net profit is used to increase the company's working capital, form funds and reserves, and invest in production.

Based on the results of net profit, you can evaluate the financial condition of the enterprise; this indicator determines how much the turnover of the enterprise can be increased or decreased, as well as how much money can be invested in the development of the enterprise.

Depending on the volume of net profit, dividends are also paid to the shareholders of the enterprise.

How is net profit calculated?

Net profit is a very important indicator of the efficiency of an enterprise. Net profit is also considered to be the funds that remain at the free disposal of the enterprise after all planned expenses.

Using net profit, an enterprise can form reserve capital, purchase new equipment for the enterprise, invest in the activities of other enterprises, do charity work, and pay dividends to shareholders. Part of the available funds is also spent on rewarding employees: bonuses, vouchers, corporate events, assistance in purchasing housing, etc.

The amount of net profit depends on many factors, namely:

• The amount of total revenue at the enterprise;
• Cost;
• Amount of tax fees;
• Amount of other income and expenses.

There is also the concept of net loss, this is when an enterprise has negative profit. Many enterprises turn out to be unprofitable, despite successful activities during the year. Conversely, a small company without a huge turnover and a wide range of products can bring in colossal amounts.

How is net profit calculated?

There are many methods used to calculate net profit. Whichever way you choose to not calculate net profit, the result will be the same for all calculation methods. But in practice, a simplified formula is used, that is, the financial results statement is filled out line by line, the final line of which is considered to be net profit.

A simplified formula for calculating net profit looks like this:

PP = V – SS – UR – KR + PD – PR – NP,

B - revenue;

CC - cost of sales;

UR and KR - administrative and commercial expenses;

PD and PR - other income and expenses;

NP - income tax.

The data for calculating profit using a simplified formula can be taken from the financial performance report of the enterprise for the required period.

Let's look at how it looks in the report, and which line to fill in, using an example in the form of a table. For example, the Podsolnukh enterprise reflected the following data in its reporting:

In this case, net profit is calculated as follows:

150 + 2 - 60 - 15 - 20 - 1.5 - 11.1 = 44.4 thousand rubles.

The formula for calculating net profit in expanded form:

PP = FP + VP + OP - N,

where PE is net profit;

FP - financial profit. It is calculated by subtracting similar expenses from income from financial activities;

VP - gross profit. Calculated as sales revenue minus production costs;

OP - operating profit. Expenses are deducted from income from other activities;

N - amount of taxes.

Formula for calculating net profit in collapsed form:

PP = P – N, where

P – profit;

N - tax amount.

Indicators that influence the formation of net profit
Net profit depends on many indicators, and judging by the calculation formula, we see that such indicators are:

1. The company's revenue is the amount of money received from the buyer for the sale of products for a certain period. Revenue also includes income received from other operations that are not related to the main activity:

• interest received from the loan provided;
• income from participation in the activities of other organizations;
• income received from the sale of property and equipment;
• rent and other income.

1. The costs of an enterprise that are associated with its activities. In financial accounting they are usually called:

• Costs associated with the production of products and their further sale, thereby forming the cost price;
• Costs associated with transporting goods and during the sales process, they form business expenses;
• Expenses not related to the main production or usually called other expenses.

The main costs of the enterprise include the following expenses:

• Payments to employees of the enterprise;
• Mandatory social contributions to the wage fund;
• Deductions for depreciation;
• Payment of utility services;
• Material and other costs.

Other expenses include both non-operating and operating expenses that are not related to production, but are paid at the expense of the enterprise. This expense item includes:

• Payment of interest on loans received;
• Write-off of the residual value of equipment not sold;
• Payment for training for company employees;
• Marketing expenses;
• Expenses that were associated with force majeure circumstances.

1. The amount of tax deductions. Since the legislation of the Russian Federation provides for several taxation regimes, for which the types and amounts of taxes differ. An enterprise can pay taxes such as: income tax, profit tax, UTII, or even combine several budget payments depending on the type of activity.

Also, the amount of tax payments may vary depending on whether the taxpayer has tax benefits.

FAQ

Question No. 1 What is net profit?

Answer: Net profit is the part of the enterprise’s balance sheet profit that remains at its disposal after paying taxes, fees, deductions and other obligatory payments to the budget.

Question No. 2: What can the resulting net profit be used for?

Answer: Using net profit, an enterprise can form reserve capital, purchase new equipment for the enterprise, invest in the activities of other enterprises, do charity work, and pay dividends to shareholders. Part of the available funds is also spent on rewarding employees: bonuses, vouchers, corporate events, assistance in purchasing housing, etc.

Question No. 3 What indicators does net profit depend on?

Answer: Net profit depends on many indicators. The main ones can be identified as follows: the amount of revenue received, cost, the amount of tax fees, other income that is not related to the main activity, as well as other expenses.

Question No. 4 What are the methods for calculating net profit?

Answer: To calculate net profit, you can use different formulas, but no matter what formula you use, you will still get the same result. Formulas come in expanded, collapsed and simplified form. But in practice, a simplified formula is used, that is, the financial results statement is filled out line by line, the final line of which is considered to be net profit.

Profit (gross income) is the main source of cash for any company. Profit goes to the assets of the enterprise in the form of cash and non-cash funds by:

• Sales of products,
• provision of services.

All material costs paid from these funds are not included in the concept of profit. Every business should strive to earn the maximum possible amount of profit.

Gross income is an estimate, and even a company that can only cover expenses through its own profits will be considered unprofitable.

Sales profit formula

Profit from sales is determined by subtracting the costs of selling goods from gross profit.

The formula for profit from sales in general is as follows:

P=V-UR-KR

Here P is profit from sales,

B – gross profit,

UR – management expenses,

CR – commercial expenses.

In accordance with gross profit the efficiency of any enterprise is calculated. Gross profit is calculated as the difference between the amount received from the sale of goods and the cost of goods. The formula for sales profit (gross) is as follows:

Pval=V-S

Here Pval is gross profit,

B – revenue from sales of products,

C – production cost.

Marginal profit

Marginal profit is the difference between operating profit and the amount of variable costs (not including value added tax). The sales profit (margin) formula looks like this:

Pmarzh=V – PZ

Here Pmarzh is marginal profit,

B – revenue,

PV – variable costs.

Variable costs include:

• employee salaries,
• costs of production raw materials,
• payment for energy, water, gas, etc.

As production expands, marginal profit will increase and variable costs will decrease. Marginal profit is considered a source for covering the fixed costs of the enterprise and generating new profit.

Sales Profit Factors

Before looking for sources of increased profit, it is important to determine the factors on which it depends. Sales profit may be influenced by internal and external factors. Internal factors can be:

• The quantity of goods sold, which is directly dependent on the profitability of sales. So, if profitability is high and sales increase, then sales profit will increase. If profitability is low, then increasing the volume of products sold will lead to a fall in profit margins.
• Assortment structure.
• The cost of the product (if the cost increases, then the profit also increases).
• Cost of production (if the cost rises, then the profit will fall, and vice versa)
• Business expenses.

External factors do not have a direct impact on the profit margin, but the cost and final volume of goods directly depend on them. These factors include:

• Depreciation,
• State regulation of the company's work,
• Natural conditions,
• Market sentiment (the relationship between supply and demand), etc.

Examples of problem solving

EXAMPLE 1

EXAMPLE 2