What is enterprise profit? What is profit, income and revenue of an enterprise? This type of profit is distinguished

Profit in economics is the relationship between costs and the cost of products sold, expressed in monetary terms. We will talk about how it is analyzed, how it is formed, and how it is distributed in a market economy.

Accounting, normal and economic profit

There are three types. Accounting in economics is what is the difference between the price of products sold and the costs of their production. The remuneration of entrepreneurial activity is called normal profit, it constitutes the cost of production. And the difference between normal and accounting profit is economic. Real according to the main criterion - size, since profit in the economy is precisely the size of the enterprise's income.

It arises under the condition that total revenue not only covers, but also exceeds all internal and external expenses. This also includes normal profit in the form of interest on capital. The desire for greater profit is an incentive for entrepreneurs to use resources as efficiently as possible, reduce costs, master new technological advances, use scientific potential, achieve technical progress and open new industries.

Under these conditions, the total amount of income from the listed types of activities, including the main ones, also increases, since profit in the economy is primarily a balance sheet increase, which is the total amount from all existing types of activities.

How do businesses generate income?

Enterprises make profits, of course, from their main production. Ancillary activities bring only some part of them, which is formed after the performance of non-industrial services - transport, construction, from the work of subsidiary farms and enterprises selling products. In the same way, revenues (profits) are replenished by providing paid services to the population.

There are also non-operating activities in almost every enterprise, regardless of its size and significance. It also makes a profit.

The difference is calculated between penalties, fines, penalties, that is, amounts paid and amounts received: rent from renting out your own premises, income from operating containers, and the like. This balance will be considered profit from non-operating activities.

Financial result of the enterprise

The current conditions of the crisis, in which all enterprises in the country, without exception, are placed, have forced the mobilization of all available internal resources, which could, if not increase, then at least maintain existing profits at the same level. Calculation and planning of economic activities are now the main components of the successful functioning of an enterprise. In this case, analysis plays a huge role, determining the further course of the economic process. Including competent identification of ways to use profits.

Profit and its value show all the strengths and weaknesses of the enterprise, and analysis of its activities helps to make the optimal decision. For this, all economic processes and relationships are scrupulously studied. The financial result of the enterprise, as well as the analysis of ways to generate income, determines rational ways of structuring funds and their rational use. In the same way, analysis of financial activity is a tool for forecasting both individual indicators and all economic profit as a whole.

Financial control

Through financial analysis, the movement of cash flows is monitored and the rational use of profits is checked. Profit must be checked for compliance with standards and standards for the expenditure of material and financial resources, and for the feasibility of costs.

Financial analysis has a certain information base - financial statements. Its results are operated by both internal users (managers and management) and external ones - creditors, owners, buyers, suppliers, exchanges, consultants, lawyers and even the press.

Of particular importance is the distribution of the enterprise’s profit, the study of key parameters, and the drawing up of an accurate and objective picture of its financial condition. Such control has its own goals aimed at studying the methods of financial activity of the enterprise.

Goals

The main goal of financial analysis is to obtain information regarding losses and income, structure, with all its changes in liabilities and assets, settlements with creditors and debtors, as well as the distribution of enterprise profits. In this case, the analyst or manager is interested in both the current state and the projection for the near or distant future. These are the expected parameters of financial condition.

Such goals can be achieved together with the solution of a whole set of specific interrelated tasks. Analytical tasks will have to specify all organizational, informational, technical, and methodological capabilities. The financial performance of an enterprise is always assessed by the results of an analysis of financial statements.

Deductive method of analysis

The main principle of analytical reading of reports is deductive - from general to specific - repeatedly applied during the analysis. This is how the logical and historical sequence of events and economic factors is reproduced, the direction is revealed, the components of profit and the strength of their influence on the overall results of operations are calculated.

Basic methods

Six main methods of reading reporting documentation can be distinguished among the many existing ones:

1. Horizontal analysis. With it, each reporting item is compared with the previous period.
2. Vertical. The structure is determined by the final financial indicators and the impact of each reporting item on the overall result is revealed.
3. Trend analysis. Each position is compared with a number of previous ones, whereby a trend is determined - the main tendency, the dynamics of a given indicator, cleared of random influences and individuality in the characteristics of certain periods. The trend forms quite possible future indicators, thus making a long-term forecast for production profits.
4. Relative indicators and their analysis. This is a calculation of the interaction of individual report items or items in different reporting forms that determine their relationship.
5. Comparative, intra-company analysis, where individual summary reporting indicators are studied for the entire company, for subsidiaries and divisions. In addition, the inter-farm indicators of this enterprise are compared with those of competitors. This is how modern enterprises calculate profits in a market economy.
6. Factor analysis. The influence of individual factors on the outcome indicator is analyzed using stochastic or deterministic research techniques. This reporting can be direct, when the performance indicator is split into its component parts, as well as synthesized (reverse), when individual elements of the report are merged into an overall performance indicator.

External financial analysis

Features of external financial analysis are as follows:

• its subjects are multiple, a large number of users are interested in information about the company’s activities;
• the goals and interests of the subjects of analysis are diverse;
• there are standard methods, accounting and reporting standards;
• the analysis is focused only on external, public reporting;
• his tasks are limited due to the previous factor;
• the results are open to users who want to get acquainted with information about the activities of the enterprise.

However, there may also be undercurrents here. If financial analysis is based only on financial statements and looks external in nature, carried out outside the enterprise by the hands of its interested counterparties, government agencies or owners, it still does not allow revealing the secrets of the success of a given company, since the content of external analysis consists only of certain factors. The components of profit and methods for achieving them usually remain outside the scope of the analytical material; only its financial result is known.

The mentioned analysis is carried out in a certain way:

1. Absolute profit indicators are analyzed.
2. Relative profitability indicators are considered.
3. The financial condition, market stability, balance sheet liquidity, and solvency of the enterprise are checked.
4. The efficiency of using loans is analyzed.
5. The financial condition of the enterprise is diagnosed and the issuers are assessed based on the rating.

Internal financial analysis

The variety of economic information regarding the activities of enterprises is truly great, and there are also many ways to analyze it. Financial reporting data and the analysis carried out on their basis are called the classical method. Internal economic analysis of finance is the main one, which is supplemented by other data from system accounting, data on production technical training, regulatory and planning information, etc.

The main significance of this information is in optimizing management. For example, an analysis of capital advances and its effectiveness, the relationship between costs, profits and turnover is required. Internal management analysis delves into production accounting data in order to conduct a comprehensive assessment of the economy and study all economic activities - whether its efficiency is high.

Features of management analysis:

• results are focused on one's own leadership;
• all sources of information are used;
• cannot be regulated from the outside;
• complete complexity in carrying out, studying all the activities of the enterprise;
• accounting, analysis, planning and decision making are integrated;
• The results are kept as confidential as possible to maintain trade secrets.

Profit Analysis

The activity of an enterprise based on financial results is reflected in a whole system of indicators that make up profit. Their systematic consideration presents a certain difficulty, since most indicators characterize not only the financial result, but have many differences in purpose. The choice is difficult for participants in commodity exchange, since the needs for information related to the real state of the enterprise are often not satisfied. The administration is interested, first of all, in the mass and structure of the profit received, as well as the factors that influenced its value. Tax authorities want to receive information, as reliable as possible, about balance sheet profit, which includes sales of products, income after the sale of property, and much more from the same series.

This means that the analysis of the components of profit in the economy is not an abstract, but a very specific analysis that helps to develop a strategy of behavior aimed at minimizing losses, financial risks, and so on. Here, first of all, such elements of the enterprise’s activity as changes in indicators are studied - each for a given analyzed period - their structure and changes are studied, the dynamics of changes are studied for a number of reporting periods (naturally, in a generalized form).

The net profit remaining at the disposal of the enterprise - funds after paying all taxes and deductions - is spent, as a rule, on the needs of the enterprise itself, and here a detailed analysis is especially necessary. This includes the expansion of production, and an increase in spending on non-productive needs, and environmental protection, and personnel training, and the creation of social funds.

See Consolidated (2 digits). operating profit margin before interest and taxes The same as net income.

A hypothetical value defined as the difference between a firm's revenues and its economic costs, including opportunity costs. 2. Economy Income on capital as a factor of production. 3. what. Addition, increase, increment of something.

Population income for ten years.

The ability to make a 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 accounting book.

balance. Gross profit differs from net profit in that it includes the costs of paying taxes and other obligatory payments.

The amount of 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. Company location;
2. Natural and environmental indicators.
3. Legislation within which the company operates;
4. The political and economic state in which the state finds itself;

Gross profit must be calculated before taxes are calculated.

The amount obtained after subtracting costs from revenue is profit. Thus, the general formula for calculating profit will look like this: Profit = Revenue - Costs (in financial terms) The net profit of an 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 for investment in the production process, for organizing reserve funds and for increasing working capital. Its size depends on several factors: tax burden on the organization, additional payments; enterprise revenue; cost of goods, etc.

What is profit in simple words

In the English-speaking tradition, the concept of “profit” can correspond to different terms - profit, gain, return.

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

A general indicator of the financial results of the economic activities of enterprises. 3. transfer Benefit, benefit (colloquial). What point do I need in this? 4. what.

Addition, increase, increment of something.

P. population. P. water in rivers.

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

Revenue is 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 efficiency 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 an organization is: Gross - the total payment received for work (or goods).

Net – used in accounting.

The meaning of the word profit

There is a distinction between full, total profit, called gross (balance sheet); net profit remaining after paying taxes and deductions from gross profit; accounting, calculated as the difference between price (sales revenue) and accounting costs, and economic profit, which takes into account opportunity costs.

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

What is profit is simple and clear

The resulting amount formed after the amount of costs is subtracted from revenue is profit. That is, the formula for calculating profit can be expressed as follows: Profit = Revenue – Costs Net represents the material assets that ultimately remain after deducting deductions, all taxes and other payments from the balance sheet profit. An indicator such as net profit is used to calculate the necessary investments in the production process, to plan and organize the main reserve funds, as well as to increase current assets.

Generally speaking, the amount of net profit directly depends on several factors: the tax burden on the enterprise, as well as additional deductions; amount of revenue; calculated cost of production and so on.

The profit of an enterprise includes the increase in the initially advanced cost 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 an enterprise.

Profit can serve as a source for improving production processes and their expansion, as a source for increasing wages, and issuing bonuses. With the help of profits, the size of dividends received by shareholders and owners increases. Profit is the most accurate characteristic of an enterprise's activities.

Profit can come in various forms. Profit is classified according to the sources of formation, according to the calculation method, 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 profit are distinguished. Gross profit is the net return on capital expressed in monetary terms. This profit represents revenue from sales of products and the cost of these sales, excluding semi-fixed management and distribution costs. Net income includes the profit that remains after subtracting all expenses from the total income of the business.

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

Gross and operating profit

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

Therefore, when considering different types of profit, it is necessary to understand that gross profit is always reduced by the amount 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 profit includes the following types of income: income from exchange rate differences, rental of property, placement of assets that were written off earlier, income received due to the sale of current assets, with the exception of financial investments.

Net profit of the enterprise

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

PR = Revenue – Cost – UKR – PR – N

Here RCM is administrative and commercial expenses,

N – taxes,

PR - other expenses.

PP = FP + VP + OP – N

Here FP is the amount of financial profit,

VP – the amount of gross profit,

OP – the amount of operating profit,

PE = PDN – N

Here PDN is the amount of profit before tax

Other types of profit

If we consider the nature of inflationary cleaning of profits, we distinguish between nominal and real profits. Nominal profit is indicated in the financial statements and corresponds to book profit.

Real profit is nominal profit, which is 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 sheet, from the sale of products, or from other operations. In accordance with the nature of taxation, profits are divided into taxable and non-taxable profits.

According to the final result, profit can be normal, negative or positive. Depending on the nature of use, profits can be distributed or capitalized.

Examples of problem solving

EXAMPLE 1

Gross revenues and profits are used in developing a business's budget of income and expenses for the upcoming financial year. These indicators reflect the costs associated with the production cycle. Gross profit does not take into account the amount of administrative or selling expenses, so it can be used to make forecasts in the short and medium term.

What is gross profit in simple words

To determine this indicator, it is necessary to know the exact amount of the organization’s income and the cost of products sold. Gross profit is the difference between revenue receipts and expenses included in the actual cost of production. When calculating the total value, there is no need to separate out tax liabilities.

The indicator is formed by subtracting from the total income for a certain period of time such expenses as:

• production costs (payment of the cost of materials and raw materials, maintenance of the equipment used);
• payment of bills for consumed electricity, water supply;
• wage.

Gross profit is the result of the company's activities, which is calculated with the frequency established by the accounting policy. Its value can be influenced by external and internal factors. What does the concept of gross profit of an enterprise include:

• income that was received after the sale of manufactured products;
• receipt of funds for services rendered or work performed;
• resources generated by logging farms;
• gross profit is not only revenue from main activities, but also profitable transactions under contracts for the sale of equipment and other own assets of the organization;
• amounts received into the company's accounts for shares purchased from it.

If gross profit has decreased, this indicates a decrease in the level of profitability of production, a drop in the level of labor efficiency, or the use of incorrect logistics. Preventive measures will include actions to reduce costs, promote goods in the target segment, and launch additional capacities to reduce average costs.

Gross profit and gross margin are different concepts. When calculating profit, variable and partially fixed costs are subtracted. Margin is characterized by focusing only on variable costs. Gross and net income differ in the amount of tax liabilities and fees payable. Net profit is calculated on the basis of gross profit by subtracting accrued taxes from it.

The statement that book profit is gross profit is incorrect. These terms cannot be identified. The value of gross profit can be found from account card 90. Balance sheet or taxable profit (gross profit is not used as a tax base) is reflected in accounting in the amount of account balance 99.

Gross profit (loss) in accounting and reporting

Summarizing the gross type of profit occurs through a comparison of the amount of debit and credit turnover of account 90, taking into account the breakdown of transactions by subaccounts. The resulting balance must be written off to account 99. The financial result can be a loss or profit (and gross profit - the difference between the debits and credits of one account). When a debit balance is formed at the end of the month, a loss appears, while credit balances indicate the profitability of the project. If gross profit is received, the posting will be in the format D90.9 - K99. At the end of each reporting year, all subaccounts under account 90 are closed.

When reflecting profit in reporting documents, negative indicators are entered without the minus sign. To indicate the unprofitability of an activity, the number is placed in parentheses. Gross profit is not shown in the balance sheet - there is no line for this. The report form requires entering data only on the part of the profit remaining undistributed as of a specific date.

Gross profit does not appear on the balance sheet, but it can be seen in the report on Form 2. The convenience of this form is that it makes it possible to trace the chain of calculations. Gross profit in the income statement is shown on line 2100. The document template with codes clearly demonstrates the procedure for calculating the indicator using lines 2110 and 2120.

Gross profit of the economy and enterprise: calculation formulas

The degree of efficiency of production cycles through profitability can be assessed on the scale of one company or the country as a whole. In the latter case, the gross profit of the economy is used; the formula involves finding the difference between the value of GDP and the total costs of producers for the manufacture of products. The resulting total shows what profit residents received or what losses they incurred as a result of the sale of their goods.

What is the gross profit of an enterprise - the essence of the concept can be traced by the formula for calculating it:

Monetary valuation of products sold – Cost of goods sold – Production costs.

According to the report of Form 2, calculations are carried out according to the following scheme:

• Line 2110 – Line 2120.

The calculated gross profit does not show the real income of the business entity, but the basis for analyzing the structure of production resources.

Profit call the difference between the income from an activity and the costs of this activity.

This is the general interpretation of the concept. However, in the process of further consideration, there is no unanimity of opinion either in theory or in practice.

Types of profit and methods of their calculation

We can say that most of the trends in economic science one way or another consider the mechanisms of formation and distribution of profit, without giving unambiguous practical recipes for the most successful method of activity.

Probably the only thing that supporters of all economic theories agree on is the way to calculate income, expenses and profits in monetary units and the recognition of the fact that any economic activity for which the costs, in general, exceed the income from it does not make economic sense.

According to some theories, profit is possible only as a result of market imbalance due to improved external conditions or useful innovation (more efficient production methods, lower costs, etc.). In all other cases, competition brings the market to a state of equilibrium with zero profitability. What remains with the owners of enterprises after paying all expenses is proposed to be considered the income of the entrepreneur, something like the salary of an executive based on the results of work. Some theories consider profit to be the price paid for entrepreneurial risk, personal efficiency, and the use of capital. Obviously, for a practical understanding of the issue, it is not necessary to go deeply into economic theory, it is enough to know and understand some common definitions

It is customary to distinguish the following types of profit:

• Accounting profit (BP)- this is a precisely defined amount between cash receipts (D), which, according to accounting rules, are considered income from activities, and costs, which, according to the same rules, should be considered expenses (R),

BP = D - R;

• Economic profit (EP)- a less clear indicator, based, to a large extent, not only on accounting data, but also on expert assessments. Such estimates may include: expenses not accounted for in accounting, the cost of possible risks and additional opportunities, lost profits, otherwise economic costs (EI), i.e. expected result from using funds in some other way

EP= D - EI;

• Gross (total) profit (GP)- amount of income (revenue from the operation) (D) minus expenses (R), i.e. the cost of this operation. Calculated using the same method as accounting profit;
• Operating profit (OP) - the indicator is similar to the one given above, however, from it it is customary to subtract not only the cost of a specific action, but also operating costs (OI), i.e. some operating expenses for core activities

OP = D - R - OI;

• Net profit (NP)- the remainder of the income after paying all expenses (∑Р), including taxes and deductions from profits,

PP = D - ∑R.

In addition to assessing efficiency and accounting for funds, the methodology for determining the amount of profit becomes necessary for the correct calculation of taxes. In Belarus, this aspect of accounting is regulated by the Tax Code of the Republic of Belarus and other legislative acts.

Enterprise profit

For a commercial organization, profit is a mandatory goal of activity. To a certain extent, this is also true for state-owned enterprises, although their tasks may differ in many ways, the profit received is also recorded in accounting and distributed according to the statutory documents. In addition, economic activities are often carried out by public, charitable, and religious organizations, but all their income must be spent on non-commercial purposes in accordance with the law and internal rules. In this case, we can only talk about accounting profit.

For an enterprise, the planned profit is important as a guideline for drawing up interim plans: supply, production, warehousing, transportation, sales, etc. At the next stage of the economic cycle, the actual profit received must be distributed in accordance with the goals of the enterprise and the prevailing conditions.

To check the effectiveness of business management, it is useful to compare the planned profit with the received one. To better understand and optimize the system of economic processes within and, to some extent, in the external environment of the organization, special methods are used, in particular factor analysis. Its purpose is to assess the influence of each of the factors of the economic system on the amount of final profit. This is convenient to do when comparing items of the same name profit and loss statement (OPL) in the past and base periods. This method cannot promise absolute accuracy of results, because It can be difficult to isolate the degree of influence of each factor separately.

Profit functions

All ways to use profit can be grouped into two general categories: consumption and. If consumption means the withdrawal of funds from the enterprise, then investment involves the further development of the economic system.

It is easy to verify that it is profit that provides the source of funds for further development by considering the opposite situation: if in a periodically repeating economic process all the goods produced (revenue) are spent to compensate for the costs incurred, then the system does not have free resources for development and is reduced to the repetition of one and the same cycle. Under favorable, stable conditions, this cycle can be repeated for quite a long time. However, changing these conditions will sooner or later require funds to rebuild the system, which an enterprise operating without profit cannot provide. This usually leads to either closure, downsizing, or a change in ownership of the organization.

All common methods of obtaining funds for the development of an enterprise can be presented in the form of several general directions:

• Financing from your own accumulated profits is the safest and cheapest option. If it fails, the organization only risks the value of its investment;
• Involvement of external, for example -. In this case, you need to prepare for a return from future profits of both the funds received and the loan fee. Attracting financing through the sale of a share in the ownership of an enterprise does not change the essence, either investments are paid off by an increase in net income, or we should talk not about development, but about losses;
• Sale of part of your own property. Loss of property involves loss of income from the use of the property sold. It is possible to compensate for a drop in income only by increasing overall profits.

In this way, they ensure the attraction of funds for the development of a private organization. Modernization of state-owned enterprises, including with a “socialist” approach to financing, ultimately also comes down to obtaining additional profit, only the scope of the project expands in accordance with the scale of the owner. In this case, it is possible to compensate for the costs both from the income growth of the modernized enterprise and the economy as a whole. However, investing without income growth exceeding expenses is also considered economically senseless.

In addition to investing the profits within the organization, external investment may be beneficial. In this case, funds withdrawn from one enterprise are invested in another. This can be a source of additional benefit for the owner of the funds, the recipient of investments and the economy as a whole, due to the redistribution of funds to the most profitable projects.

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