Calculation of profitability of the enterprise: basic indicators.

Any enterprise must necessarily be evaluated from different points of view and for various purposes: for making certain managerial decisions, determining the degree of investment attractiveness and the like. One of the parties, the assessment of which is mandatory - is the effectiveness of the activity. For this purpose, the profitability and profitability of the enterprise are analyzed.

The profitability of the enterprise is, as is evident from the name itself, its ability to make a profit. The concept of profitability of the enterprise, in turn, characterizes a specific level of profitability. It is clear that the very fact of profitability does not allow you to accurately assess the effectiveness, so to make decisions, it is the calculation of the profitability of the enterprise.

Any profitability indicators are calculated by the same method, undergoing only small changes. These indicators are relative, therefore, and they are defined as a ratio. The formula of each of them is a fraction, in the numerator of which there is profit, and in the denominator it is the indicator whose profitability is subjected to study. It is worth noting that the calculation of the profitability of the enterprise can be carried out in coefficients, but more often the result of calculations is increased by a factor of 100, yielding a result in percent.

Perhaps, it is necessary to stop on what indicators of profitability are calculated most often. Obviously, the necessary information is taken from the forms of accounting. Profit is present in the calculation of all indicators, so first consider those that can be determined only by the profit and loss account. The greatest interest in this case will be represented by the profitability of sales and products. The first indicator is determined by the ratio of profit to the revenue received. Obviously, he characterizes the share of profits in this very revenue. As for the profitability of products, the denominator of this indicator is the cost. The meaning of its calculation is to determine the magnitude of the profit that each ruble of realized production costs brings.

Calculation of profitability of the enterprise would be incomplete without an estimation of efficiency of use of its property. The property of the enterprise, as you know, is represented in the asset of the balance sheet. The efficiency of the use of property is determined by calculating the profitability of assets both in general and in separate groups. Accordingly, to determine the level of profitability, it is necessary to divide the profit by the sum of all assets (the balance sheet total) or the value of current or non-current assets.

Considering the indicators of profitability, we did not stop at what profit index should be used in determining them. Most often, net profit is used, since it is the final financial result. However, in a number of cases recourse is made to the calculation based on other indicators of profit. So, the profitability of sales can be calculated on the basis of profit from sales, and the return on assets is often calculated on profit before tax. This is due to the fact that it is necessary to choose exactly that indicator, which is economically most suitable for the calculated coefficient of profitability. In addition, this or that kind of profit allows you to take into account the influence of certain factors, but not take into account other, less significant.

Be sure to keep in mind that the calculation of the profitability of the enterprise should be supplemented by analysis. The most commonly used method of analysis are comparisons. The profitability of the enterprise can be considered in dynamics, comparing with the indicators of previous periods. In addition, it makes sense to make comparisons with similar indicators of other similar enterprises or with industry average values. A more complex method is factor analysis. Its use makes it possible to assess the specific quantitative impact on certain indicators of the profitability of individual factors and their aggregate.