Overall profitability of the enterprise

In order to determine the degree of effectivenessenterprises need to resort to the calculation of certain indicators. As a rule, they determine the relative level of profitability and are called indicators of profitability. There is no such indicator, which would characterize the overall profitability of the enterprise. This is due to the fact that the company's activities are multifaceted and each of these indicators separately characterizes the effectiveness of using a particular resource.

A sufficiently generalized productionthe activity of the enterprise can be defined as the impact by means of labor on objects of labor. Objects representing both objects of labor and its means are the property of the enterprise, and in aggregate constitute production assets. The total profitability of production assets is calculated by the ratio of the profit received to their value. Production funds are used to produce products, that is, the implementation of core activities. This stipulates that the profit indicator used in the calculations should not include other income and expenses. This indicator is the profit from sales, and it is usually used in determining this type of profitability. As for the value of the property, the profitability of which is calculated, then here too there is some feature. It consists in the fact that profit is the amount that accumulates during the period and that is how it is reported. And the cost is reflected in the balance sheet for a certain date, so it is difficult to take into account possible changes. It is best to use the average cost in the calculations, and if there is a lack of information, you can allow the calculation based on the value at the end of the period.

Production funds are only part of theassets, however, the general profitability of all property is usually established. The calculation procedure is completely analogous and consists in dividing the profit by the value of assets. This cost should also be calculated as average, if there is such an opportunity. As for profit, the profit from sales here, as a rule, is not used. Most often, the calculations are based on net profit. Also, sometimes there are indicators of profitability of assets, which are calculated on profit before tax. Thus, profitability can be somewhat overestimated, but this influence is eliminated in the process of further analysis.

Analysis of profitability indicators most oftenis to use the comparison method. The simplest and most obvious method, which allows you to judge the dynamics of the effectiveness of the company, is a horizontal analysis. It consists in determining the absolute and relative changes in the profitability indicators over several periods, with the establishment of regularities and trends. If it is possible to use more information, then it is possible to apply comparisons not only in time, but also in space - with the indicators of other similar enterprises. In addition, it is possible to compare the profitability achieved at a given enterprise with those characteristic of the industry as a whole.

It is worth mentioning the fact that the totalthe profitability of assets and production assets can be subjected to factor analysis. This kind of analysis consists in a certain transformation of the mathematical model of indicators, which implies its expansion or elongation. Such transformations allow us to identify factors that affect profitability, after which their specific quantitative impact is determined. This analysis can be carried out according to the DuPont method or by any other suitable technique.

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