The profitability of a product is determined by the ratio of profit to. To help the entrepreneur: how to calculate the profitability of a product. An illustrative example of calculating profitability

In the system of performance indicators of enterprises, the most important place belongs to profitability.

Profitability is a use of funds in which the organization not only covers its costs with income, but also makes a profit.

Profitability, i.e. profitability of the enterprise, can be estimated using both absolute and relative indicators. Absolute indicators express profit, and are measured in value terms, i.e. in rubles. Relative indicators characterize profitability and are measured as a percentage or in the form of coefficients. Profitability indicators are much less influenced than profit margins, since they expressed in different ratios of profit and advanced funds(capital), or profit and expenses incurred(costs).

When analyzing, the calculated profitability indicators should be compared with the planned ones, with the corresponding indicators of previous periods, as well as with data from other organizations.

Return on assets

The most important indicator here is the return on assets (otherwise - the return on property). This indicator can be determined using the following formula:

Return on assets- This is the profit remaining at the disposal of the enterprise, divided by the average value of assets; we multiply the result by 100%.

Return on assets = (net income / average annual assets) * 100%

This indicator characterizes the profit received by the enterprise from each ruble advanced for the formation of assets. Return on assets expresses the measure of return in a given period. Let us illustrate the procedure for studying the return on assets indicator according to the data of the analyzed organization.

Example. Initial data for the analysis of the profitability of assets Table 12 (in thousand rubles)

Indicators	Actually	Deviation from the plan



5. Total average cost of all assets of the organization (2 + 3 + 4)
(point 1 / point 5) * 100%

As can be seen from the table, the actual level of return on assets exceeded the planned level by 0.16 points. This was directly influenced by two factors:

oversized increase net profit in the amount of 124 thousand rubles. increased the level of return on assets by: 124/21620 * 100% = + 0.57 points;
over-planned increase in the assets of the enterprise in the amount of 993 thousand rubles. reduced the level of return on assets by: + 0.16 - (+ 0.57) = - 0.41 points.

The overall influence of the two factors (balance of factors) is: +0.57 + (- 0.41) = + 0.16.

So, the increase in the level of return on assets in comparison with the plan took place solely due to an increase in the amount of the company's net profit. At the same time, the growth of the average cost, others, and also reduced the level return on assets.

For analytical purposes, in addition to the indicators of the profitability of the entire set of assets, indicators of the profitability of fixed assets (funds) and profitability are also determined working capital(assets).

The profitability of the main production assets

The indicator of the profitability of fixed assets (otherwise called the indicator of return on assets) is presented in the form of the following formula:

The profit remaining at the disposal of the enterprise multiplied by 100% and divided by the average cost of fixed assets.

Profitability of current assets

The profit remaining at the disposal of the enterprise multiplied by 100% and divided by the average value of current assets.

Return on investment

The rate of return on invested capital (return on investment) expresses the efficiency of using funds invested in the development of a given organization. The ROI is expressed by the following formula:

Profit (before income tax) 100% divided by the currency (total) of the balance minus the amount of short-term liabilities (the total of the fifth section of the balance sheet liability).

Return on equity

In order to get an increment through the use of the loan, it is necessary that the return on assets, minus the interest for the use of the loan, is greater than zero. In this situation, the economic effect obtained as a result of using the loan will exceed the cost of attracting borrowed funds, that is, the interest for using the loan.

There is also such a thing as shoulder financial leverage representing specific gravity(share) of borrowed sources of funds in the total amount of financial sources of formation of the organization's property.

The ratio of the sources of formation of the organization's assets will be optimal if it provides the maximum increase in the return on equity in combination with an acceptable amount of financial risk.

In some cases, it is advisable for an enterprise to obtain loans in conditions where there is a sufficient amount of equity capital, since the return on equity increases due to the fact that the effect of investing additional funds can be significantly higher than the interest rate for using a loan.

Lenders of this enterprise just like its owners (shareholders) expect to receive certain amounts of income from the provision of funds of this enterprise. From the point of view of lenders, the rate of return (price) of borrowed funds will be expressed by the following formula:

The fee for the use of borrowed funds (this is the profit for lenders) multiplied by 100% divided by the amount of long-term and short-term borrowed funds.

Return on total capital investment

A generalizing indicator expressing the efficiency of using the total amount of capital at the disposal of the enterprise is return on total capital investment.

This indicator can be determined by the formula:

The costs associated with attracting borrowed funds, plus the profit remaining at the disposal of the enterprise, multiplied by 100% divided by the total capital used (balance sheet currency).

Product profitability

Product profitability (profitability production activities) can be expressed by the formula:

The profit remaining at the disposal of the enterprise multiplied by 100% divided by the total cost of goods sold.

In the numerator of this formula, the profit from the sale of products can also be used. This formula shows what profit the company has from each ruble spent on the production and sale of products. This indicator of profitability can be determined both as a whole for a given organization, and for its individual divisions, as well as for individual types of products.

In some cases, the profitability of products can be calculated as the ratio of the profit remaining at the disposal of the enterprise (profit from the sale of products) to the amount of proceeds from the sale of products.

The profitability of products, calculated as a whole for a given organization, depends on three factors:

from changes in the structure of products sold. An increase in the share of more profitable types of products in the total amount of products contributes to an increase in the level of profitability of products;
a change in the cost of production has the opposite effect on the level of profitability of products;
change in the average level of selling prices. This factor has a direct impact on the level of product profitability.

Return on sales

One of the most common indicators of profitability is the return on sales. This indicator is determined by the following formula:

Profit from the sale of products (works, services) multiplied by 100% divided by the proceeds from the sale of products (works, services).

Profitability of sales characterizes the share of profit in the structure of proceeds from product sales. This indicator is also called the rate of return.

If the profitability of sales tends to decrease, then this indicates a decrease in the competitiveness of products in the market, since it indicates a decrease in demand for products.

Let's consider the order of factor analysis of the indicator of profitability of sales. Assuming that the product structure has remained unchanged, we determine the impact on the profitability of sales of two factors:

change in the price of products;
change in the cost of production.

Let us denote the profitability of sales of the baseline and the reporting period, respectively, as and.

Then we get the following formulas expressing the profitability of sales:

Representing profit as the difference between the proceeds from the sale of products and its cost, we received the same formulas in a transformed form:

Legend:

∆K- change (increment) in profitability of sales for the analyzed period.

Using the method (method) of chain substitutions, let us define in a generalized form the effect of the first factor - changes in the price of products - on the profitability of sales.

Then we calculate the impact on the profitability of sales of the second factor - changes in the cost of production.

where ∆К N- change in profitability due to changes in product prices;

∆К S- change in profitability due to change. The total influence of two factors (balance of factors) is equal to the change in profitability compared to its baseline value:

∆K = ∆K N + ∆K S,

So, an increase in the profitability of sales is achieved by an increase in prices for products sold, as well as a decrease in the cost of sales of products. If the share of more profitable types of products in the structure of products sold increases, then this circumstance also increases the level of profitability of sales.

To increase the level of profitability of sales, an organization must focus on changes in market conditions, monitor changes in product prices, constantly monitor the level of costs for production and sale of products, and also implement a flexible and reasonable assortment policy in the field of production and sale of products.

There are several basic business performance metrics for every entrepreneur. Profit is just one of them.

It is critical for starting businesses to know how to calculate profitability. Otherwise, at first glance, a successful enterprise may be unprofitable.

Online calculator of profitability of the enterprise

What is profitability in simple words

Profitability is a reflection of the profitability of a businessman's actions. In essence, the concept implies the difference between expenses and income.

The expenditure part is associated with the cost of all types of resources, including labor, as well as depreciation - wear and tear of equipment during its operation. Profitable item - all money received by an entrepreneur for the sale of goods and services.

Types of profitability

The types of profitability are determined by the direction of the enterprise.

In economic science, it is customary to distinguish between the following types:

goods and services - the difference in the cost of resources and income from sales, sometimes calculated for a specific product;
enterprises - accounting of all cash flows an enterprise is used to assess the value of a business;
assets - completeness and correctness of use of business units.

Making a profitability calculation in order to clarify the balance is important not only for the business owner who wants to evaluate his asset, but will also be required when selling the company and wanting to attract third-party sources of financing.

Profitability indicators

In order to get the most complete picture of the profitability of a business, it is recommended to analyze several indicators. This way you can take into account more factors and see the situation from different angles.

TO key indicators relate:

assets;
products;
sale of goods and services;
staff;
capital, including investment.

Depending on the specifics of the business, other indicators of profitability are also used, but even the analysis of the above is enough to determine the current situation and the level of the trend.

How to calculate profitability

The profitability is determined using special formulas. The data that is applied is taken from the ledgers.

The key parameters required for substitution are:

profit is the difference between income and expense, before taxes;
the value of assets on the balance sheet of the company.

The formula is based on the fact that the first indicator is divided by the second, and the result is multiplied by one hundred percent.

Formula for return on sales

Return on sales is the markup that is set to the cost of a product when it is sold to an intermediary or end consumer.

The formula is based on the ratio of profit to revenue multiplied by one hundred percent.

This parameter shows what part of the profit is in the total revenue from the product. This is important, because if it is low, then the owner's income is low.

Sales profitability is easy to calculate for small businesses or specific departments. When analyzing efficiency large companies, the indicator is rarely analyzed.

Product profitability formula

It is important to determine the profitability of products, since the main task of a business is to make a profit from the goods and services sold. The formula is based on a ratio of net income to cost.

The calculation cycle is as follows:

A certain amount of finished goods is taken.
The time period for its implementation is determined, it is especially important for perishable items.
The cost of production is determined, that is, how much money was spent on creation.
After sales, the net profit indicator is calculated - income minus costs.

The last two parameters are inserted into the formula and the metric is measured.

Production profitability - formula and calculation example

The profitability of production allows not only to assess the current state of affairs at the enterprise, but also to determine the prospects for the growth and development of the company.

The calculation formula is identical for all types of business, regardless of the line of business.

To calculate the indicator, it is required to divide the production volume of profit by costs. Further, the indicator is multiplied by one hundred percent.

Consider an example that characterizes the calculation:

proceeds from the sale of products amounted to 100,000 rubles;
labor costs, raw materials, trade costs - 60,000 rubles;
profit is respectively equal to 40,000 thousand.

When you substitute data into the formula, the yield will be 66%.

The formula for calculating the profitability threshold

The profitability threshold is an indicator at which the company will not be unprofitable, but will not make a profit either.

This parameter is important for entrepreneurs in order to determine the minimum sales level that must be exceeded in order not to go into negative territory.

The calculation is made according to two formulas:

Determination of margin. Subtract the firm's variable costs from the revenue, then multiply the difference by one hundred percent;
Rate of return. Fixed cost to margin ratio.

Thus, the key concepts affecting this indicator are:

mark-up for a product when selling it;
costs of fixed and variable costs.

Profitability of current assets

Assets are an essential element of any business. The entrepreneur's income will depend on the competent and full use of the existing units of employees, equipment and premises.

The calculation of the profitability of current assets is one of the most common methods for assessing the value of an enterprise. Simply put, this analysis gives an understanding of how much money a specific person or specific equipment brings or takes away.

If the parameter is below zero for all assets, the company is unprofitable, since the available resources do not bring real profit.

ROI calculation formula

The calculation of the return on investment is important when analyzing the effective use of funds attracted to the project.

The simplest formula for calculating is: the ratio of profit to investment, multiplied by one hundred percent.

To obtain such a parameter as profit, the cost price is deducted from the total income for the billing period.

Negative profitability

If, after performing the calculations, the parameter turned out to be negative, then this is a direct indicator of the unprofitableness of the enterprise. This indicates, first of all, that the businessman's income is lower than the baseline. expenditure part... The economic position of such a person is unreliable.

Gross profitability

Gross margin reflects how much profit each ruble earned from the sale of goods and services brings.

Most often, accountants are involved in calculating gross profitability. They have a special counting scheme.

Operating profitability

Operating profitability includes the calculated profitability of administrative expenses and other costs, sales and assets. That is, it is a reflection of aggregate data and gives the most accurate representation of the state of affairs in the company.

Ways to Increase Enterprise Profitability

If the analysis gave disappointing results, then the entrepreneur needs to take measures to increase profitability.

Before starting to take action, it is recommended to track the dynamics over several periods of time, as factors such as:

seasonality;
the emergence of competitors;
rising prices for raw materials and labor force in the region.

The main ways to increase profitability include:

Improving the quality of the manufactured product in order to increase the sales market.
Development of marketing company, including advertising, search for new distribution channels.
Reducing production costs without compromising quality, for example, upgrading equipment or attracting highly qualified personnel in exchange for several people without a specialty, or reducing salaries.

An entrepreneur is able to make an assessment on his own using an online calculator, if he knows the formula and initial data. Involvement of third-party specialists is also permissible.

A self-respecting company evaluates the effectiveness of its economic activity, relying on some relative indicators or intuition, will not. Professionals use a metric that calculates unit profitability. Let's consider how to easily and accurately determine the profitability of products sold.

The current state of the company can and should be monitored. This will allow you to understand the success of a project, the quality management decisions, potential production facilities, the appropriateness of the "course" taken, the prospects for business development.

Timely analysis of factors that directly affect the implementation of a future project (market saturation, purchasing power, dynamics of demand for products, price fluctuations, projected inflation, etc.) will give an understanding of the "level" of return from its launch (payback period, profitability, product popularity) ...

One of the most significant indicators designed to help assess the effectiveness of the firm is profitability. In this article, we will consider the indicator that is responsible for the quality of sales from the standpoint of profitability.

The economic meaning of ROI

When calculating any coefficient, it is important to understand its economic meaning. The profitability of products (Return on Margin / ROM), sold by a particular company in the reporting period, can be considered in different aspects.

In the general sense, the profitability of the sold products shows the business activity of the company, in the narrow sense - what part of the proceeds from the sale of the goods can be attributed to profit. From this it becomes clear that for the productivity of a business, not turnover is more important, but earnings from it (net profit). So, the ratio of return on sales:

allows you to calculate the share of production costs in sales;
reflects the effectiveness of the company's product sales;
give a chance comparative analysis business performance.

In numerical terms, ROM shows the relationship between the level of sales income and the level of total costs for their manufacture and sale of products. The indicator obtained as a result of the calculation will give an understanding of how much profit one invested in manufacturing process currency unit.

Return on sales: differences from other indicators of profitability

It should be noted that there are a lot of profitability indicators (profit, assets, capital, costs, total, etc.). Mostly all of them allow you to calculate the level of profit in relation to the invested funds. The profitability of sales "stands apart". This indicator shows the opposite relationship - how much money will be attributed to profit in the volume of products sold.

Another significant difference of ROM is that the indicator “ignores” the volumes of working capital and capital involved in generating the desired level of profitability.

It is extremely convenient to ignore such indicators for comparative analysis between different companies. That is, using the ROM calculation, you can evaluate the efficiency of a business of various sizes.

How to calculate the profitability of products sold

Evaluation of an enterprise in terms of general indicators often gives a false understanding of the success of its operation.

For example, good results can be demonstrated at the expense of existing assets.

However, the assessment of the company's productivity by segment (for example, the profitability of products sold) is more objective.

In sum, it most accurately and fully reflects the efficiency of work. At the same time, it is possible to correct incorrectly organized business processes.

retail value of products;
advertising costs;
production cost;
fare;
the cost of storing products in a warehouse.

It is necessary to take into account all the costs associated to one degree or another with the release of products and incurred by the enterprise until the profit from its sale is made. All indicators must be expressed in financial units. This will allow you to calculate ROM in a specific amount (absolute value), also as a percentage (relative value).

The effectiveness of products is calculated using proportions. The numerator should reflect the size of the profit received from a unit of goods, the denominator should be the size general expenses... The result obtained during the calculation is multiplied by 100%.

Diversification is the distribution of funds between different kinds assets in order to minimize risks. Here we will talk about the reasons for using diversification, as well as its types and types.

Basic formulas

The variability of formulas for calculating ROM is very large. This is due to the intention of some authors to correlate this ratio with the indicators of net profit.

However, in the classical formulas it comes it is about the difference between selling value and costs, which is not a net profit.

Here are the "working" formulas for calculating the profitability of products sold, not "book", but adjusted to the norms and standards of modern business:

ROM = PR (profit from sales) / TCtechn (production cost);
ROM = PR (profit from sales) / TS (total cost of products to be sold);
ROM = CP (net profit) / TC (total cost of products to be sold);
ROM = PP (net profit) / TCtechn (production cost).

Profit from sold products and net profit are conveniently calculated using the formulas:

PR = TR (revenue from products to be sold) - TC (total cost of goods);
CP = PR (profit from sales) - PR (other expenses) + PR (other income) - N (amount of tax burden).

You can find some indicators in financial statements... For example, profit from sales is reflected in the Report on financial results (050 pages).

P. 010 of the same document will show the amount of revenue, page 190 - net profit.

And in order to determine the full cost price, you will need to add pages from 020 to 040. ROM can be calculated by product type or in aggregate. Other should be understood to mean costs and revenues not related to the manufacturing and marketing of products.

Let's also give a formula by which Western financiers calculate the return on sales:

ROM = P (profit) / OR (sales)

Profitability- relative indicator economic efficiency... The profitability of an enterprise comprehensively reflects the degree of efficiency in the use of material, labor, money and other resources. The profitability ratio is calculated as the ratio of profit to assets or flows that form it.

In a general sense, product profitability implies that the production and sale of a given product brings profit to the enterprise. Unprofitable production is production that is not profitable. Negative profitability is an unprofitable activity. The level of profitability is determined using relative indicators - coefficients. Profitability indicators can be conditionally divided into two groups (two types): and return on assets.

Return on sales

Return on sales is a profitability ratio that shows the share of profit in every ruble earned. It is usually calculated as the ratio of net profit (profit after tax) for a certain period to expressed in funds sales volume for the same period. Profitability formula:

Return on sales = Net profit / Revenue

Return on sales is an indicator pricing policy the company and its ability to control costs. Differences in competitive strategies and product lines cause a significant variety of values of profitability of sales in different companies. It is often used to assess the operating performance of companies.

In addition to the above calculation (profitability of sales by gross profit; English: Gross Margin, Sales margin, Operating Margin), there are other variations in the calculation of the profitability of sales indicator, but to calculate all of them, only data on the profit (loss) of the organization (i.e. e. data of form No. 2 "Profit and loss statement", without affecting the data of the Balance sheet). For example:

profitability of sales by (the amount of profit from sales before interest and taxes in each ruble of proceeds).
profitability of sales by net profit (net profit per ruble of sales proceeds (English: Profit Margin, Net Profit Margin).
profit from sales per ruble invested in the production and sale of products (works, services).

Return on assets

Unlike the return on sales indicators, the return on assets is calculated as the ratio of the profit to the average value of the assets of the enterprise. Those. the indicator from the form No. 2 "Report on financial results" is divided by the average value of the indicator from the form No. 1 "Balance sheet". The return on assets, like the return on equity, can be considered as one of the indicators of the return on investment.

Return on assets (ROA) is a relative indicator of operational efficiency, quotient from dividing the net profit received for the period by the total amount of the organization's assets for the period. One of the financial ratios included in the group of profitability ratios. Shows the ability of a company's assets to generate profits.

Return on assets is an indicator of the profitability and efficiency of the company, cleared of the influence of the amount of borrowed funds. It is used to compare enterprises in the same industry and is calculated using the formula:

where:
Ra is the return on assets;
P - profit for the period;
A is the average value of assets for the period.

In addition, the following indicators efficiency of use certain types assets (capital):

Return on equity (ROE) is a relative indicator of performance, quotient from dividing the net profit received for the period by the organization's equity capital. Shows the return on shareholders' investment in a given venture.

The required level of profitability is achieved through organizational, technical and economic measures. Increasing profitability means getting more financial results at a lower cost. The profitability threshold is the point that separates profitable production from the unprofitable, the point at which the income of the enterprise covers its variable and conditionally fixed costs.