The concept of profit and its value. Economic profit. Factors influencing profit

Gross profit is the total income a firm earns over a given period of time. It takes into account income from all activities minus production costs. The amount of such profit must be reflected in the book. balance.

From net, gross profit differs in that it includes the cost of paying taxes and other obligatory payments.

Factors influencing gross profit

Gross profit depends on several factors. They are divided into two groups.

The first group includes factors depending on the management segment:

• Reducing the cost of goods;
• Indicator of the effectiveness of the sale of goods;
• Growth rate of production volumes;
• Carrying out activities aimed at improving the quality of goods;
• Utilization of production capacity at maximum performance.

The second group includes external factors:

• Location of the company;
• The legislation under which the company operates;
• The political and economic state in which the state is located;
• Natural and ecological indicators.

How to Find Gross Profit

The calculation of gross profit must be carried out before the calculation of taxes. Gross profit of the enterprise is defined as the sum with the amount of additional profit. The calculation should be carried out taking into account the type of company:

1. Trading firms. To calculate gross profit, you must first calculate the total net profit. To determine net revenue, all product returns and discounts granted must be subtracted from total credits. Further, from the amount of net profit received, you need to subtract the cost of goods sold. The resulting difference will be the gross profit of the company.
2. Firms providing services. The gross profit of such firms is equal to the net revenue. For the calculation, it is required to subtract the amount of discounts and returns from the total gross income.

However, before you start calculating gross profit, you should pay attention to the following points:

• Gross revenue. At the end of each labor day it is required to check that all information related to the receipt of money was correctly reflected in the reports.
• Sales tax collected. It is important to check that the reports correctly indicate the indicator that reflects the amount of tax collected. All funds recovered must be included in gross income.
• TMZ. This indicator should be estimated at the beginning this year. It must be compared with the size of the final profit for the past year. They must be the same.
• Purchases. If, in the course of carrying out the activity, the founders of the company acquire something for personal use, the amount of money spent must be excluded from the cost of products sold.
• TMZ at the end of the year. It is required to make sure that all stocks of the firm are accounted for in compliance with established requirements. A prerequisite is to use the right pricing methodology. To confirm the size of the available inventories, an inventory list is sufficient.

1. Checking the correctness of the calculations. If a firm is engaged in wholesale or retail, it does not take much time to recalculate. All you need to do is divide your gross income by your net income. The resulting value is expressed as a percentage. It reflects the difference between the cost products sold and its face value.
2. Add. sources of gross profit. If the firm receives income from sources that are not related to the main activity, such income must be added to gross income. The result of the addition is the gross income.

Gross Profit - Calculation Formula

VP \u003d D - (C + W), where:

• VP - the amount of gross profit;
• D - the number of manufactured goods sold (in value terms);
• C - the cost of manufacturing goods;
• Z - production costs.

To carry out the calculation, it is required to subtract the cost of goods sold from the amount of revenue.

Gross Profit - Balance Formula

Gross profit (p. 2100) on the balance sheet is calculated as follows:

revenue (p. 2110) - cost of sales (p. 2120).

To conduct a competent calculation of the size of gross profit, it is necessary to study in detail all the cost items included in the cost of goods.

Profit as a qualitative indicator of the efficiency of the enterprise, characterizes the rationality of the use of means of production, financial, labor and resources. An enterprise that is not making a profit market economy exhaust resources and go bankrupt.

The goal of any business is profit. Profit is a qualitative indicator of the efficiency of the enterprise, which characterizes the rationality of the use of the means of production by the enterprise, as well as financial, labor, material resources.

An enterprise can make a profit only by producing goods or services that are in demand and satisfy the needs of society. Moreover, the price of these goods and services will play a significant role - it must correspond to the solvency of consumers.

As for the enterprise itself, pricing for it is carried out taking into account costs. An acceptable price for the company's products is possible only if the company does not exceed a certain level of costs. As a result, the amount of consumed resources and costs should be less than the revenue received. This will mean that the company is operating at a profit.

If an enterprise operates without making a profit, then, in a market economy, it will deplete its resources and leave production area becoming bankrupt.

Profit reflects the net income of the enterprise and performs the following functions:

• characterizes economic effect from the activities of the enterprise. If the enterprise makes a profit, this means that all production costs are covered by income;
• has a stimulating function, as it is the basis for further expansion of production, its improvement, as well as for increasing wages employees and payment of dividends to owners and shareholders;
• is a source of replenishment of budgets different levels, forming financial resources not only the enterprise itself, but the state as a whole.

Maximum profit and its sustainable growth is the most important condition for the prosperity of not only a particular enterprise, but also national economy generally. Thanks to profit, the company can increase its scale, strengthen its position in the market. As a rule, this process is accompanied by the renewal and improvement of the enterprise itself. This is the general purpose of entrepreneurship.

In the economic sense, profit is calculated as the difference between cash receipts and payments, in the economic sense - as the difference between the property status of the enterprise in question at the end and beginning of the billing period. Since there is a difference between the economic and accounting approach to the costs of the enterprise, a distinction is made between economic and accounting profit.

• Accounting profit is equal to the total income of the enterprise minus accounting (explicit) costs;
• Economic profit is equal to total income minus economic (explicit + implicit costs),
• Economic profit equals accounting profit minus implicit costs.

There are different types of profit:

• Gross profit is the amount of profit (loss) of an enterprise from the sale of all types of enterprise products (services, works, property), as well as income from non-sales operations (minus the amount of expenses on them). Gross profit is an indicator of production efficiency.
• Profit (loss) from the sale of products is equal to the proceeds from the sale (excluding VAT and excises, as well as indirect taxes and fees) minus the costs of production and sale (included in the cost of this product). If under conditions of stable wholesale prices the profit of the enterprise increases, this indicates a decrease in the total individual costs of the enterprise for the production and sale of products. Sales profit is an indicator of the main activity of the enterprise, i.e. activities for the production and sale of their products.
• Profit before taxation (or balance, accounting profit) - is reflected in the balance sheet of the enterprise, is the final financial result of the enterprise; revealed through accounting all his business transactions and estimates of balance sheet items. Accounting profit is an indicator of the effectiveness of the entire economic activity enterprises.
• Taxable profit - calculated during tax accounting within the framework of current legislation, is the basis for determining the taxable base.
• Net profit (loss) for the reporting period (or profit for distribution) is that part of the profit that remains with the enterprise after paying all taxes and obligations and is used for the needs of the enterprise (development of production, social needs, etc.).

In addition to those listed, many other types of profit are used in the scientific economic literature. Specialists pay much attention to the analysis of profit, that is, the analysis financial results economic activities of the enterprise, using different approaches and levels of detail.

Financial performance indicators clearly demonstrate the effectiveness of the enterprise in absolute terms, which is important not only for the enterprise itself, but also for those interested in its activities. For example, company management this analysis help identify prospects further development enterprises, since the most important source of financing for these purposes is profit.

The main tasks of profit analysis:

• justification of the planned profit in accordance with the volume and cost of products sold;
• profit assessment in accordance with the business plan;
• calculation of the influence of various factors on the deviation of the actual profit from the planned one;
• identification of reserves for profit growth and ways to use them.

The analysis of financial results is carried out in several directions:

• horizontal analysis consists in studying changes in the value of indicators for the analyzed period;
• vertical analysis is an analysis of the structure of profit indicators, as well as their structural dynamics;
• factor analysis, consists in identifying factors and sources of profit growth and their quantitative assessment;
• assessment of profitability indicators in dynamics.

The following sources are used to analyze profits: the balance sheet of the enterprise, the income statement, the accounting register and financial plan enterprises.

Important for the enterprise is the analysis of the "quality" of profit, that is, the structure of the sources of its formation.

The high "quality" of profit means an increase in production volumes with a simultaneous decrease in its cost. With a low "quality" of profit, there is no growth in the volume of manufactured products; at the same time, there is an increase in selling prices for these products.

For the enterprise it is necessary to strive to reduce the cost of production in order to improve the "quality" of profit. Thus, the "quality" of profit characterizes the effectiveness of the company's use of available reserves. The most important aspect of profit analysis is the determination of the break-even, or critical, volume of production and sales. Volume will break even if total cost of manufactured products will be equal to the proceeds from its sale. In this case, the company does not receive any loss or profit from the sale of products.

This situation is also called the profitability threshold or the break-even point (critical point). To achieve the threshold of profitability, it is necessary to produce and sell such a volume of products that, due to the amount of proceeds from sales, cover the variables and fixed costs enterprises.

To make a profit, you need to increase production and sales. If this volume is less than the critical one, then the enterprise will receive a loss. Only on the basis of profit analysis it is possible to develop correct management decisions, develop business plans, etc. This is true for any enterprise, regardless of their size, type and scale of activity, as well as the form of ownership.

The profit of the enterprise includes the increment of the initially advanced value in the production and economic activities of the enterprise to ensure its activities. Profit can be defined and measured by the ratio of income and expenses of the enterprise.

Profit can serve as a source for improving production processes and their expansion, a source of increasing wages, and issuing bonuses. With the help of profits, the amount of dividends that shareholders and owners receive increases. Profit is the most accurate characteristic of the enterprise.

Profits can come in various forms. Profit is classified according to the sources of formation, according to the method of calculation, according to the nature of taxation, according to the nature of use and according to the value of the final result of management.

In accordance with the calculation method, gross, net and marginal profits are distinguished. Gross profit is the net return on capital expressed in cash. This profit represents the proceeds from the sale of products and the cost of these sales, excluding semi-fixed management costs and distribution costs. Net profit includes the profit that remains after deducting all expenses from the total income of the enterprise.

Marginal profit includes the excess of revenue over variable costs production.

Gross and operating profit

Gross profit is the difference between the cost of products and the net income that is received in the sales process. The cost can be not only production costs, but also property taxes, land fees, the amount of other payments, excise duty, tax on owners Vehicle and etc.

Therefore, when considering various kinds profit must be understood that gross profit is always reduced by the sum of all payments and fees.

Operating income is derived from the activities of the enterprise, with the exception of revenue, which is initially included in the balance sheet profit. Operating income includes the following types of income: income from exchange rate differences, rental of property, placement of assets that were written off earlier, income that was received due to the sale of current assets, with the exception of financial investments.

Enterprise net profit

Net profit comes to the disposal of the enterprise only after the income tax is paid. This profit is most often used in two directions: the consumption fund and the accumulation fund.

PE \u003d Revenue - Cost - UKR - PR - N

Here RBM is administrative and commercial expenses,

N - taxes,

PR - other expenses.

PE \u003d FP + VP + OP - N

Here FP is the amount of financial profit,

VP - gross profit,

OP - the amount of operating profit,

PE \u003d PDN - N

Here, PTI is the amount of profit before tax

Other types of profit

If we consider the nature of the inflationary cleaning of profits, then they distinguish nominal and real profits. Nominal profit is indicated in financial reporting and corresponds to the balance sheet profit.

Real profit is nominal profit adjusted for inflation. In order to determine real profit, nominal profit is correlated with the consumer price index.

In accordance with the sources of formation, profit can be balance, from the sale of products, from other operations. In accordance with the nature of taxation, profits are divided into taxable and non-taxable profits.

In accordance with the final result, the profit can be normal, negative and positive. According to the nature of use, profit can be distributed and capitalized.

Examples of problem solving

EXAMPLE 1

The task

Profit can be the basis: 1. deterioration of production processes,

Hello! In this article, we will talk about related, but not identical concepts: revenue, income and profit.

Today you will learn:

1. What is included in the revenue of the enterprise;
2. What is the income and profit of the company formed from;
3. What are the main differences between these concepts.

What is revenue

Revenue - earnings from the direct activities of the company (from the sale of products or services). The concept of revenue is found exclusively in business and entrepreneurship.

Revenue characterizes the overall performance of the enterprise. It is revenue, not income, that is reflected in accounting.

There are several ways to account for revenue in an enterprise.

1. The cash method defines revenue as real money received by the seller for the provision of services or the sale of goods. That is, when providing installments, the entrepreneur will receive proceeds only after the actual payment.
2. Another way of accounting is accrual. Revenue from it is recognized at the time the contract is signed or the buyer receives the goods, even if the actual payment occurs later. However, advance payments are not included in such revenue.

Types of revenue

Revenue in an organization is:

1. Gross- the total payment received for the work (or product).
2. Pure- applied in . From gross revenue, indirect taxes (), duties, and so on are deducted.

The company's total revenue is made up of:

• Proceeds from core activities;
• Investment proceeds (sales of securities);
• Financial earnings.

What is income

The definition of the word "income" is not at all identical to the term "revenue", as some entrepreneurs mistakenly believe.

Income - the sum of all the money earned by the enterprise through its activities. This is an increase in the economic benefit of the enterprise by increasing the capital of the company by the inflow of assets.

A detailed interpretation of the ways of generating income and their classification are contained in the Accounting Regulation "Income of organizations".

If cash proceeds are funds received by the company's budget in the course of its core activities, then income also includes other sources of funds (sale of shares, receiving interest on a deposit, and so on).

In practice, enterprises often carry out diverse activities and, accordingly, have various channels for generating income.

Income - the overall benefit of the company, the result of its work. This is the amount that increases the capital of the organization.

Sometimes the income is equal in size to the net revenue of the organization, but most often companies have several types of income, and there can be only one revenue.

Income is found not only in entrepreneurship, but also in the daily life of a private person who is not engaged in business. For example: scholarship, pension, salary.

Receiving funds outside the scope entrepreneurial activity will be called income.

The main differences between revenue and income are given in the table:

Revenue	Income
The result of the main activity	The result of both main and auxiliary activities (sale of shares, interest on a bank deposit)
Occurs only as a result of conducting commercial activities	Allowed even for unemployed citizens (allowances, scholarships)
Calculated from the funds received as a result of the work of the company	Equal to revenue minus expenses
Cannot be less than zero	Let's go negative

What is profit

Profit is the difference between total income and general expenses(including taxes). That is, this is the same amount that in everyday life could be safely put in a piggy bank.

In an unfavorable situation, and even with a large income, the profit can be zero, or even go negative.

The main profit of the company is formed from the profit and loss received from all areas of work.

Science economics identifies several main sources of profit:

• Innovative work of the company;
• Entrepreneur's skills to orient in the economic situation;
• Application and capital in production;
• The company's monopoly in the market.

Types of profit

Profit is divided into categories:

1. Accounting. Used in bookkeeping. On its basis, accounting reports are formed, taxes are calculated. Explicit, reasonable costs are subtracted from total revenue to determine accounting profit.
2. Economic (surplus profit). A more objective indicator of profit, since when calculating it, all economic costs incurred in the work process are taken into account.
3. Arithmetic. Gross income minus miscellaneous costs.
4. Normal. Necessary income in the work of the company. Its value depends on the lost profit.
5. Household. Equal to the sum of normal and economic profits. Based on it, decisions are made on the use of the profit received by the enterprise. Similar to accounting, but calculated differently.

Gross and net profit

There is also a division of profit into gross and net. In the first case, only the costs associated with the workflow are taken into account, in the second, all possible costs are taken into account.

For example, the formula by which gross profit in trade is calculated is the selling price of a product minus its cost.

Gross profit is most often determined separately for each type of activity, if the enterprise operates in several directions.

Gross profit is used when analyzing the areas of work (the share of profit from which activity is greater), when determining the company's creditworthiness by the bank.

Gross profit, from which all costs have been deducted (credit interest, and so on), forms net profit. From it are accrued to shareholders and owners of the enterprise. And it is the net profit that is reflected in and is the main indicator of the business.

EBIT and EBITDA

Sometimes, instead of the understandable word "profit", entrepreneurs meet such mysterious reductions as EBIT or EBITDA. They are used to evaluate the performance of a business when the compared objects operate in different countries or are subject to different taxes. Otherwise, these indicators are also called cleared profit.

EBIT represents profit in the form in which it was before taxes and various interest. It was decided to highlight this indicator in separate category, as it is located somewhere between gross and net profit.

EBITDA is nothing more than profit before taxes, interest and depreciation. It is used exclusively to evaluate the business, its characteristics. It is not used in domestic accounting. for commercial equipment.

Thus, income is the funds received by the entrepreneur, which he can later spend at his own discretion. Profit - the balance of funds minus all expenses.

Both income and profit can be predicted if you take into account revenue for past periods of work, fixed and variable costs.

The differences between profit and revenue are as follows:

The line between concepts may be unclear for an ordinary employee, it does not matter to him how revenue differs from profit, but for an accountant there is still a difference.

See Consolidated (2 characters). contribution margin operating before interest and taxes Same as net income.

A hypothetical value defined as the difference between a firm's revenues and its economic costs, taking into account the costs of lost opportunities. 2. Economy Capital income as a factor of production. 3. what. Addition, augmentation, augmentation.

Profit of the population for ten years.

The ability to profit for yourself from any event. Data from other dictionaries

What is gross profit in simple words

It takes into account income from all activities minus production costs. The amount of such profit must be reflected in the book.

balance. From net, gross profit differs in that it includes the cost of paying taxes and other obligatory payments.

Gross profit depends on several factors. They are divided into two groups.

The first group includes factors that depend on the management segment: The second group includes external factors:

1. Location of the company;
2. Natural and ecological indicators.
3. The legislation under which the company operates;
4. The political and economic state in which the state is located;

The calculation of gross profit must be carried out before the calculation of taxes.

The amount received after deducting the costs from the revenue is the profit. Thus, general formula the calculation of profit will look like this: Profit = Revenue - Costs (in financial terms) The net profit of the enterprise is the funds remaining from the balance sheet profit after deducting taxes, fees, deductions and other established payments to the budget.

It is used to invest in manufacturing process, to organize reserve funds and to increase working capital. Its size depends on several factors: the tax burden on the organization, additional payments; enterprise revenue; cost of goods, etc.

What is profit in simple words

In the English tradition, the concept of "profit" may correspond to different terms - profit, gain, return.

The amount of profit characterizes the success of doing business, making a profit is usually the main goal and driving motive of all types of entrepreneurship. Profit: definition from Ozhegov's dictionary 2.

Generalizing indicator of financial results of economic activity of enterprises. 3. trans. Benefit, benefit (colloquial). What do I need in this paragraph? 4. what.

Addition, augmentation, augmentation.

P. population. P. water in rivers.

What is revenue, profit and income: how do they differ and what are formed from

Revenue - earnings from the direct activities of the company (from the sale of products or services).

The concept of revenue is found exclusively in business and entrepreneurship. Revenue characterizes the overall performance of the enterprise. It is revenue, not income, that is reflected in accounting.

There are several ways to account for revenue in an enterprise.

Types of revenue Revenue in the organization is: Gross - the total payment received for work (or goods).

Net - used in accounting.

The meaning of the word profit

Distinguish full, total profit, called gross (balance sheet); net profit remaining after payment of taxes and deductions from gross profit; accounting, calculated as the difference between the price (proceeds from the sale) and accounting costs, and economic profit, which takes into account imputed, opportunity costs.

Typically, economic profit is less than accounting profit by the amount of uncompensated own costs entrepreneur, not included in the cost, which sometimes include lost opportunities. In addition, there may be costs that are not reflected in the balance sheet. Glossary of financial terms Dictionary Russian language.

What is profit simply and clearly

The resulting amount, formed after the amount of costs is deducted from the proceeds, is profit. That is, the formula for calculating profit can be expressed as follows: Profit \u003d Revenue - Costs Net represents the tangible assets that ultimately remain after deducting deductions, all taxes and other payments from the balance sheet profit. An indicator such as net income is used to calculate necessary investment in the production process, for planning and organizing the main reserve funds, as well as for increasing current assets.

If you speak in in general terms, the amount of net profit is directly dependent on several factors: the tax burden on the enterprise, as well as additional deductions; the amount of revenue; calculated cost of production and so on.