Calculation of profit

The main task facing any business entity is to make a profit. The financial result, calculated for the reporting period based on the results of the enterprise, directly depends on the size of the organization's own capital. The profitability index of a business entity indicates the effectiveness of its work. The increase in the amount of income contributes to the creation of a base for expanding production, material incentives for employees and for self-financing. In connection with the transition of the national economy to market conditions, the value of the indicator, which reflects the magnitude of the financial result, increased.

Profit is a positive outcome of the organization. A negative amount of income indicates a loss. The formula for calculating profits includes the difference between two indicators - the proceeds from the sale of goods (services, works) and expenses incurred in the course of the organization's activities. In order to increase the efficiency of the business entity, it is necessary to determine the reserves that would allow increasing the volume of output and sales, reducing the cost, and as a result, to generate revenue growth.

To make the right management decisions and develop a strategy for the company's activities, they make a planned profit calculation. From the correct definition of this indicator will depend on the success of the business entity. The planned calculation of profits should be justified from the point of view of economic indicators. This will allow to correctly allocate investments, determine the growth of own assets, and create effective systems for organizing and stimulating the work collective. A certain definite planned indicator of the magnitude of the financial result is of great importance for the economy of the whole country.

A planned calculation of profit can be made using the direct account method. This method is used in the event that the range of products is small. The calculation of profits, the formula for which consists of the difference in such quantities as the amount of revenue obtained as a result of the sale of products at appropriate prices, and the full cost of these goods, is quite simple. However, its use with a large range of goods is very laborious and does not allow to determine the influence of various factors on income growth. In this regard, the calculation of profit in its planning is carried out mainly through the analytical method. This method of determining the financial result involves determining the income from the release of each type of products.

To calculate the indicator of profit using the analytical method, determine the basic profitability, which is a quotient from dividing income for the reporting period by the amount of prime cost for the same time for goods that are comparable; Calculate the volume of the forthcoming output, based on the costs of the reporting period, and determine the profit taking into account the basic profitability; Analyze the dependence of the indicator of planned profit on various factors of the production process (cost, quality, assortment, etc.).

In practice, there is also a combined method of calculating profit, when the components of the first two methods are used in determining the planned indicator of the financial result.

The current stage of development of management requires a reliable calculation of the optimal amount of the enterprise's income. In order to accurately predict the profit, it is necessary to apply different ways of determining it. In addition to the above, there are also financial analysis techniques that allow for strategic and operational planning.