Profit is the main indicator of the efficiency of the enterprise

Profit is the difference between income and expenses from the productive or financial activity of a business entity. This indicator reflects the efficiency factor from the activity of the entrepreneur and characterizes the excess of revenue over expenses.

Depending on the method of calculation and the direction of distribution, the following types are allocated: balance sheet (gross) profit, operating profit, and also after taxation and from ordinary activities.

Gross profit is calculated as the difference between net income and cost of sales. At the same time, in addition to costs for production, resource costs and local taxes are included in the cost price. Thus, the amount of balance sheet profit is reduced by these payments.

Operating profit is the balance profit, which is adjusted for the corresponding operating income and expenses, and is an indicator of the effectiveness of the existence of any business entity. Also, this indicator shows the success of the company's production activity without taking into account the influence of external indicators.

The profit from ordinary activities shows the operational, adjusted for the amount of the difference in financial income and expenses. This indicator is the amount with which the tax is directly charged.

Financial income includes: income received from investing in other companies, dividends, loan interest, income from exchange rate differences and others. Financial expenses are taken into account: payment of interest on loan capital; Losses resulting from the mark-up of financial investments, non-current assets, as well as costs that are not related to the operating activities of the enterprise.

Net profit is the one that comes to the disposal of the business entity after the payment of the tax. The enterprise uses the received sum for personal purposes in two directions:

- accumulation fund - for development of production, investment of other economic entities and creation of a reserve fund ;

- Consumption fund - for payment of interest to shareholders, material incentives for employees based on performance, as well as any charity.

The profit of the enterprise is a positive result of the activity of the business entity obtained from operating activities and is formed at the expense of such sources:

- through the sale of products - displays the difference between the proceeds from the supply without VAT and the full cost of production;

- from the sale of property - is calculated as the difference between the sale price and the residual value of the sold object;

- due to non-sale operations - income received from joint activity of economic entities, interest on shares, fines, debt obligations.

Bank profit is the difference between the interest received by the bank for the money given to it and the interest that it pays for the money received, minus the costs associated with its activities.

With the help of banks, most of the credit resources of any country are concentrated. These financial institutions carry out banking operations in a wide range, as well as provide financial services to legal entities and individuals.

All banking institutions are classified according to the following characteristics:

- form of ownership - joint-stock, state, mixed;

- types of work performed - universal and specialized (for example, investment, trade, mortgage, etc.);

- territorial principle - national and regional.

Thus, profit is the main goal of the enterprise, for its maximization, various companies are organized or merged.