Commercial profitability formula for balance sheet. Normal profitability in banking

The economic essence of profitability lies in the fact that it shows the amount of profit per ruble of costs. Depending on what indicators are used in the calculations, there are several indicators of profitability. Their numerator is usually one of three values: profit from sales (PR), balance sheet profit (PB) or net profit (Ph). The denominator is one of the following indicators: production costs of sold products, production assets, gross income, equity, etc.

Profitability of production is the ratio of book profit to the average cost of production assets. This indicator characterizes the amount of profit per one ruble of the cost of production assets. Calculated according to the formula:

R etc = , where

R etc– profitability of production;

PB - balance sheet profit;

PF- the average cost of production assets (fixed and working capital).

Profitability of core business- the ratio of profit from sales to the costs of production of sold products (works, services). This indicator allows you to judge what profit each ruble of production costs gives. Calculated according to the formula:

R main d . = , where R main d. – profitability of the main activity;

ETC- profit from sales;

З pr - the cost of production of sold products.

Return on total cost is defined as the ratio of net profit to the average cost of production assets (fixed and current assets), as well as the maintenance of employees. This coefficient shows the amount of profit per unit cost of total resources. Calculated according to the formula:

R zs = , where R zs– profitability of total costs;

IF - net profit ;

PF- the average cost of production assets (fixed and working capital);

FOT- the cost of maintaining employees (wage fund).

Product profitability- the ratio of profit from the sale of products to the proceeds from the sale as a whole. Shows how much profit each ruble of the cost of goods sold gives. Calculated according to the formula:

R prod= , where

R prod- profitability of products;

ETC - sales profit;

RP - overall sales revenue.

Profitability of individual products- the ratio of profit from the sale of products specific type to the proceeds from its sale. Calculated according to the formula:

R ed= , where

R ed- profitability of individual products;

P ed – profit from the sale of a particular type of product;

RP ed – proceeds from the sale of a particular type of product.

In countries with a market economy, to characterize the profitability of investments in activities of a particular type, the return on investment (capital) is calculated. This indicator can be calculated from the standpoint of the interests of various groups: owners, investors, enterprises, etc.

Investors (owners and landers) are the main suppliers of capital to the enterprise. Their total income is net profit and the amount of interest payable. This total return can be compared either to all assets or to long-term capital; in the first case, a coefficient is calculated, known as return on assets, in the second - return on invested capital:

R but = ;

R And = , where

R but – return on assets;

R And– profitability invested capital;

IF- net profit (profit, for distribution among owners);

VP- Percentage to be paid;

SSA- average annual value of assets;

SC- equity;

BEFORE- long term duties.

Indicator return on assets gives an assessment of the effectiveness of investing in the assets of the enterprise; in other words, the correctness of the choice of just such an investment is assessed (in particular, we are talking about the industry affiliation of the enterprise). Indicator return on invested capital characterizes the assessment of the effectiveness and expediency of the relationship between investors and the enterprise they created - it evaluates the profitability of long-term capital.

The most common financial indicator for assessing the feasibility of investments from the perspective of the owners of the enterprise is the indicator return on equity:

R sk = , where

R sk – return on equity;

SSK is the average annual cost of equity capital.

The considered indicators are supplemented by coefficients of profitability of sales. There are various algorithms for calculating them, depending on which of the profit indicators is the basis for the calculations, but the most commonly used are gross, operating (earnings before interest and taxes) or net income. Accordingly, three indicators of return on sales are calculated:

(a) gross profit margin, or gross margin on sales (R

; (b) operating profit margin, or operating margin of sales (R

); (c) net profit margin, or net profit margin on sales ( R h ).

but)

shaft

= =

= ,

in)

ETC

- profit from sales;

PSA- cost of goods sold;

RO - operating expenses (excluding interest payable and taxes)

IF - net profit.

Profit and profitability analysis of Dedal LLC

The main activities of the company "Dedal" is: the production of plastering, installation of metal building structures, as well as their dismantling. The company provides a full range of services in the field of climate technology: individual and industrial design of air conditioning, ventilation, heating and water supply systems, engineering services, express analysis of object parameters, drawing up specifications, electrical installation and commissioning of all proposed equipment of any complexity, service and warranty service in the field of domestic and industrial air conditioning, ventilation and heating.

The company is working on Russian market since 1996. Experience in the provision of professional and service determines the reputation of the company and its responsibility to customers.

Sources of financing of working capital of the company are own funds and accounts payable. The policy of LLC "Dedal" for financing working capital is to ensure the efficient use of equity and the financial stability of the company (see Appendix B). The main factor that entails a change in the policy of financing working capital is the reduction in the volume of work in connection with the global financial crisis.

As a result of work in 2012, there is a decrease in the main financial and economic indicators. The value of net profit in 2012 compared to 2011 decreased by 52.1% and amounted to 1,655,600 rubles. instead of 2517400 rubles. The average value of equity capital also decreased from 9,719,700 rubles. up to 7668400 rub.

Factors that influenced the change in the amount of revenue from core activities over the past 4 years, as well as an assessment of their impact on profit indicators are presented in table 3 (see Appendix D). The table shows that it is the increase (decrease) in the volume of work that has the main influence. So the decrease in the amount of profit in 2012 compared to 2011 is justified by a decrease in the amount of work. Customers began to refuse to perform construction and repair work at all or reduce their volume to a minimum due to the global financial crisis. From here follows the impact on profits of another factor - the general economic situation in the country. The influence of this factor in 2012 increased by 5 times.

Consider the profitability ratio of sales(ROS). This indicator reflects the efficiency of the enterprise and shows the share (in percent) of net profit in the total revenue of the enterprise. In Western sources, the profitability ratio of sales is called - ROS ( return on sales). Below I will consider the formula for calculating this coefficient, give an example with its calculation for a domestic enterprise, describe the standard and its economic meaning.

Profitability of sales. Economic meaning of the indicator

It is advisable to start the study of any coefficient with its economic meaning. What is this ratio for? It reflects the business activity of the enterprise and determines how the enterprise works effectively. The return on sales ratio shows how much Money from the sold products is the profit of the enterprise. What is important is not how many products the company sold, but how much net profit it earned. clean money from these sales.

The profitability ratio of sales describes the effectiveness of the sale of the main products of the enterprise, and also allows you to determine the share of the cost in sales.

Return on sales ratio. Calculation formula

The formula for return on sales by Russian system financial statements as follows:

Return on sales ratio = Net profit / Revenue = line 2400 / line 2110

It should be clarified that when calculating the ratio, instead of net profit, the numerator can be used: gross profit, profit before taxes and interest (EBIT), profit before taxes (EBI). Accordingly, the following coefficients will appear:

Gross profit margin on sales = Gross profit/Revenue
Operating profit ratio =EBIT/Revenue
Return on sales ratio for profit before taxes =EBI/Revenue

To avoid confusion, I recommend using the formula, where the numerator is net income (NI, Net Income), because. EBIT is calculated incorrectly based on domestic reporting. It turns out the following formula for Russian reporting:

In foreign sources, the profitability ratio of sales - ROS is calculated by the following formula:

Video lesson: "Sales profitability: calculation formula, example and analysis"

Profitability of sales. An example of a balance sheet calculation for JSC Aeroflot

Let's calculate the return on sales for Russian company OJSC Aeroflot. To do this, I will use the InvestFunds service, which allows you to get the company's financial statements by quarter. Below is the import of data from the service.

Profit and loss statement of JSC Aeroflot. Calculation of the profitability ratio of sales

So, let's calculate the profitability of sales for four periods.

Return on sales ratio 2013-4 =11096946/206277137= 0.05 (5%)
Return on sales ratio 2014-1 = 3029468/46103337 = 0.06 (6%)
Return on sales ratio 2014-2 = 3390710/105675771 = 0.03 (3%)

As you can see, the return on sales slightly increased to 6% in the first quarter of 2014, and in the second quarter it doubled to 3%. However, the profitability is greater than zero.

Let's calculate this coefficient according to IFRS. To do this, we take data on financial statements from the official website of the company.

Aeroflot IFRS report. Calculation of the profitability ratio of sales

For the nine months of 2014, the return on sales ratio of JSC Aeroflot was equal to: ROS=3563/236698=0.01 (1%).

Let's calculate ROS for 9 months of 2013.
ROS=17237/222353=0.07 (7%)

As can be seen, over the year, the ratio deteriorated by 6% from 7% in 2013 to 1% in 2014.

Return on sales ratio. standard

Meaning normative value for a given coefficient Kp>0. If the profitability of sales turned out to be less than zero, then you should seriously think about the effectiveness of enterprise management.

What level of sales profitability ratio is acceptable for Russia?

– mining – 26%
— Agriculture – 11%
– construction – 7%
– wholesale and retail – 8%

If you have a low value of the coefficient, then you should increase the efficiency of enterprise management by increasing the customer base, increasing the turnover of goods, reducing the cost of goods / services from subcontractors.

If you have approached creditors or investors, then you have probably come across such a concept as the profitability of an enterprise. What it is? How is it calculated? What affects this indicator? We will try to answer these questions for you.

What is enterprise profitability?

If we turn to the definition, then profitability is a relative indicator economic efficiency. Profitability is measured as a percentage, and is calculated by dividing the amount of profit by the amount of assets and resources that form it.

So, the profitability of an enterprise is an indicator that illustrates the degree of efficiency in the use of property assets (current and equity) by an enterprise in its activities. main meaning calculation of profitability is to show how much profit is received by the enterprise for each ruble invested in its production assets.

The level of profitability of the company is influenced by many factors: the structure of capital, its sources, the structure and value of assets, the degree of involvement of production resources in the activities of the enterprise, the cost of working capital, their sources, the amount of proceeds from sales, the amount of costs incurred during the reporting period.

The formula for calculating the profitability of an enterprise
Rp = B / (average OPF + average OA), where
Rp - profitability of the company;
B - balance sheet profit for the reporting period;

average OPF - the average value of the value of the company's fixed assets for the reporting period;

average OA - the average value of the value of current assets for the reporting period.

Balance sheet profit of the enterprise

This profit is also called accounting profit. In fact, this is the company's profit received at the end of the reporting period, i.e., profit before tax. To obtain this value, it is necessary to subtract the following indicators from the revenue received from the sale of products and services:

Cost of goods, works and services sold;
business expenses;
management expenses.

Do not forget to add to the amount received the profit from operating and non-operating activities. If a loss is received on these types of operations, subtract it from the total amount.

The resulting value will be the company's profit before tax. If you take the accounting statement of profit and loss (form No. 2), then the amount of balance sheet profit can be “peeped” in the line “profit (loss) before tax”.

Average values of working capital and production assets

The average cost of fixed production assets is determined quite in a simple way. It is necessary to take the value of production assets at the beginning of the reporting period and at the end, add them together and divide by two. We do the same with the determination of the average cost of working capital.

If we take the balance sheet (form No. 1), then we will see the cost of fixed production assets in the line "Fixed assets".

We are looking for the cost of working capital in the same reporting. The values at the beginning and end of the reporting year can be found in the final line of the second section of the document, “ current assets". We also find the average.

We substitute everything into the formula and find the profitability of the company. Let's give an example!

An example of calculating the profitability of an enterprise.

The company "Omega" in 2011 received 20 thousand rubles total profit subject to income tax. At the same time, the value of its fixed assets at the beginning of the year amounted to 5,300, and at the end - 10,200 rubles. The result for the second section of the balance sheet "Current assets" as of January 1, 2011 amounted to 30,800, and at the end of 2011 - 30,500 rubles. Let's find the profitability of the enterprise.

The average OPF will be equal to: (5,300 + 10,200) / 2 = 7,750 rubles.
Average OA: (30,800 + 30,500) / 2 = 30,650 rubles.
The profitability of the enterprise will be: * 100% = 52%

52% profitability is a good result for the company. But for an accurate analysis of the profitability of an enterprise, it is better to compare its indicators in dynamics. If there is an increase in profitability, it can be argued that the ongoing management policy of the management is effective and leads the company to well-being. If there is a decline in the indicator, it is worth looking for the reasons for the decrease in the profitability of your activity.

The enterprise must be profitable - it is for this purpose, to be profitable, that it is created. We hope that our information will help you easily carry out the relevant economic analysis activities of your company.

Any enterprise, even the smallest one, necessarily calculates its profitability - this is one of the main performance indicators. Let's take a closer look at how to properly calculate and what will increase this figure.

What is profitability in simple words?

Profitability is economic indicator efficiency. In other words, it shows how profitable the business is. This indicator should be calculated as a percentage and to obtain it, it is enough to simply divide the amount of profit by the amount of assets spent. It is important to note that such concepts as profitability and profit are closely interconnected - for example, if a company makes a profit by selling services or goods, it is profitable and vice versa.

To assess the profitability of a business, you need to take into account all indicators - both relative and abstract:

Absolute will help to determine how the company has developed for each year, to assess its profit. To obtain more reliable data, the inflation rate for the billing period should also be taken into account.
But relative indicators are more reliable for calculations, since they show the ratio between the income of a company and the funds invested in it. It is relative indicators that are called the level of profitability. At the same time, this indicator should be monitored throughout the life of the company. For example, in case of growth, the work of the company's employees and administration should be noted, but if this indicator falls, then it is advisable to review the company's policy and business management.

At the same time, profitability, unlike profits and incomes, can be used to compare different companies, their activities, and success. In addition, the profitability indicator has other areas of application:

Helps to evaluate the success of the company
By examining the results, you can quickly understand how well the company is doing.

financial planning

Having received the result, the company's management will be able to build a further strategy for the company. So, if the level of profitability falls, you should improve the work of the company, increase the level of sales - do everything possible to improve the company's affairs. You should not conduct any risky transactions or any other actions that could harm your company during this period. But if, according to the results, it was found that the profitability is high, you can safely invest in any other projects that can bring profit.

Increasing the level of efficiency

By calculating the profitability, the company's management can assess where the company is experiencing problems, which areas should be improved, and which work well.

Investment attractiveness

If the enterprise has high performance profitability, this will be an important signal for the investor - you can work with this company.

Competitiveness

Based on the results of the profitability assessment, we can say whether it is justified to compete with another company, in which areas your company is ahead of it, and where it is losing.

Transactions

If you are going to sell a company, you first need to assess its value. This indicator is closely related to the profitability indicator.

How to calculate the profitability of the enterprise?

If to speak plain language, then it is quite simple to calculate the profitability: you need to take the net profit of the organization for a certain period (a year, several years) and divide it by the sum of all expenses available for the same period. To calculate the profitability as a percentage, multiply the resulting number by 100%.

Having carried out the calculations, it is possible to assess the degree of efficiency in the distribution of all the company's funds (working capital, property, etc.). The main purpose of this indicator is to see in digital terms the profit that was spent by the company for every ruble of expenses.

In accounting, the calculation of profitability is carried out according to the following formula: P \u003d BP: SA * 100%, where:

R - profitability;
BP is the balance sheet profit of the company. It is equal to revenue for a certain period minus the cost of production, all management and organizational expenses (excluding taxes).
SA is the total value of all assets (production assets, assets).

Agree, it is very simple to calculate profitability. True, the information obtained in this form does not give a complete picture of the state of affairs. To get more accurate information for each industry, you need to calculate the profitability individually. Let's find out how to do it right.

We determine the profitability of production - one of the main performance indicators

The profitability of production is one of the most striking indicators of the entire detail of the company. Based on this indicator, an analysis of the state of all production processes, a decision is made to change the course of the company. If this indicator is not too high, it is worth developing a set of measures to increase the level of profitability. For example, many organizations resort to reducing the cost of goods, more rational use of resources, etc.

Let's calculate the profitability of production. First, we determine the balance sheet profit using accounting data. To do this, we need to find out the average annual amount of fixed assets (this includes tangible assets, the depreciation of which affects the formation of the cost of goods). For this you need:

Add up the value of all funds at the beginning of the month.
Add up the value of funds at the beginning of the year and its end, divide the resulting number by two.
Divide the results obtained by 12 (number of months in the reporting period).

Rpr - profitability.
BP - balance sheet profit.
OF - fixed assets.
OS - working capital.

What is it and what are the criteria for verification? Read more in our material.

How well the capital works - we calculate the return on assets

When calculating profitability, it is necessary to evaluate the company's assets. If this indicator is at a low level, this will indicate that the company's capital is not working, there is no profit, which is why assets will begin to decrease over time. However, too high level return on assets does not speak well: in this case, for its safety, it is better to transfer part of the capital to the stabilization fund.

At the same time, it is quite difficult to determine which part of the funds to leave for a "rainy day" and which to put into work - you must first conduct an accurate economic analysis.

At the same time, it is very important to monitor what kind of return a unit of invested capital produces. To do this, we present the following calculations:

First, we determine how many goods were sold for certain period. To do this, you need to get all the information on payment or the volume of shipments in the accounting department.
We calculate the cost.
We calculate operating expenses.
We calculate the amount of taxes.
After that, we add up all tax payments, costs, cost and subtract the resulting figures from the volume of goods sold. This will allow us to know the net profit of the enterprise.
We determine the value of all assets, where we necessarily include both equity and everything required by the company.
It remains just to divide the fifth point by the sixth and multiply the data obtained by 100% - that's the value of return on assets.

What is the profitability of sales and how to calculate this indicator?

If the company's capital is performing well, as are the assets, production is operating efficiently, but the profitability of the enterprise still leaves much to be desired, the problems may be caused by poor sales of services and goods. To understand whether this is a mistake, you need to accurately calculate the profitability of sales.

The instruction will be as follows:

First you need to determine the period for which we will recognize this indicator. It can be a year, half a year, a quarter or even a month.
Determine the total revenue from the sale of products. It is necessary to happen the sum of all income for the implementation for the required period.
From the accounting department we take documents on the company's net profit for this time.
We calculate profitability: the amount of net profit divided by sales revenue.

Having received the data, simply compare it with another time period - this will allow you to show the dynamics of sales. At the same time, it is not a fact that an increase in profit in monetary terms will show a positive trend in sales - here everything will depend on the relative indicator (the ratio of revenue and profit), which will show whether profitability is growing or decreasing.

If the indicator decreases, this indicates the need to optimize the business. For example, it is necessary to analyze in more detail the sale of a certain group of goods, sales time, etc. Perhaps you need to slightly change the range of products or improve the customer base.

True, it is worth noting that a decrease in this indicator is far from always associated with the poor work of marketers or outlets. Often, external factors also affect the profitability of sales. For example, the economic situation in the country, etc. Therefore, it is so important that a professional economist work in the organization, who will not only be able to carry out all the calculations, but will also be able to predict changes in order to respond to them in time.

What factors influence these figures?

We have already described how to calculate these indicators and how important it is to track the dynamics of their changes. But we should not forget that both external and internal factors affect profitability, which is why it is so important to create a favorable “environment” for improving all indicators.

TO external factors it is customary to attribute the cost of materials, equipment - the cost of the goods produced also depends on this. To internal:

Performance.
Production costs.
Labor costs for employees of the company.
Taxes.
The volume of goods produced and the number of sales.

At the same time, production efficiency also depends on internal optimization. For example, by increasing the price of a product and reducing its cost, you can get more profit, which means that profitability also grows. You can automate the work of some departments, which will also reduce the cost of remuneration of specialists, in addition, modern technology minimizes marriage.

But if the level of profitability turned out to be low, it is impossible to do without changing the work of the enterprise. This includes steps such as:

Revision of the range of manufactured products based on the study of demand.
Reducing the cost of goods.
Acceleration of trade.
Improve product quality, which will improve competitiveness.
Sales expansion, search for new buyers.
Increasing the professionalism of employees to improve productivity.

Simultaneously with the above measures, it is necessary to reduce the influence of various negative factors, which include downtime, receipt of defective goods, and a decrease in demand. It is also worth improving the company's marketing policy, attracting professionals to sales.

In contact with

One of the fundamental markers of productivity is , which is defined as an index of economic viability, demonstrating the level of efficiency in the exploitation of production, material, financial, labor and other resources.

Profitability of sales

Profitability includes several fundamental indicators, including such as profitability of sales.

Return on sales is a measure of how much money from a product sold should be considered the profit received by the company.

The calculation of the profitability of sales is made for a certain time period and is expressed in. With the help of the latter, a company can effectively optimize its pricing strategy and the costs directly related to its implementation.

This indicator is characterized by an active alternation of periods of its increase and decrease. The reason for the intensive growth of the coefficient can equally be an increase in profits, a decrease in sales volumes, and the simultaneous influence of these factors.

Profit growth can be caused by an increase in prices, a decrease in costs, etc., as for a decrease in sales volumes, the reasons for this phenomenon may be different. If this process takes place after an increase in prices, then this is quite natural. If the reason is, for example, the loss of interest in the product, then you should adjust your activities.

Formulas and calculation features

The calculation of the profitability of sales is carried out for such purposes as:

Effective provision of profit control;
Monitoring the development of the company's business activity;
Comparison with profits generated by competing companies;
Optimal definition of both profitable and unprofitable realizations;
Assessment of the share of production costs in the general implementation process;
Ensuring control over pricing policy;
In other important commercial activities company purposes.

To calculate the profitability of sales indicators are used different kinds received profit, in connection with which the calculation of this coefficient is made for several different .

However, they all basically contain an equation such as:

Рp=(P/V) *100%, where:

Rp - profitability of sales,
P - profit,
B is revenue.

In most cases, profitability is made according to such three main values as:

gross profit,
Operating profit,

The algorithm for calculating gross profit provides for dividing the latter by revenue and then multiplying the resulting result by one hundred percent - Rp = (Pv / V) * 100%, where:

Rp - profitability of sales,
Pv - gross profit,
B is revenue.

Gross profit is determined by subtracting sales from the proceeds received. The indicated indicators are extracted from the Profit and Loss Statement (Form No. 2)

The algorithm for calculating operating profit provides for dividing profit up to revenue and then multiplying the resulting result by one hundred percent - Рp = (Mon/V) * 100%, where:

Rp - profitability of sales,
Mon - profit before tax,
B is the revenue
The indicators for this calculation are also extracted from form #2.

The return on sales calculated using this formula shows what specific part is contained in the revenue received by the company minus the transferred and paid interest.

The net profit calculation algorithm provides for the division of net profit by revenue and the subsequent multiplication of the resulting result by one hundred percent - Rp = (Pch / V) * 100%, where:

Rp - profitability of sales,
Pch - net profit,
B is revenue.

The necessary indicators for this calculation, as well as in the above cases, should also be extracted from Form No. 2.

Analysis

Profitability calculation

Regular analysis of the profitability of sales of the company allows for effective management economic activity, improve the performance of the latter, increase , promptly respond to changes in market conditions, etc.

Carrying out the factorial profitability of sales, it is necessary to take into account the specific features of the impact exerted by profitability on factors such as: changes in the company's products or the services and works it performs.

The most effective analysis is carried out over several months or even years, this approach allows you to determine the general trend of the company's economic development and identify its weaknesses.

When conducting a profitability analysis, it is necessary to be guided by such fundamental and at the same time fairly simple criteria (applicable to absolutely all companies, regardless of their type of activity) as:

Increasing profitability is a positive trend.
Decrease in profitability is a negative trend.

In order to determine the presence of certain trends in the changes occurring with the profitability of sales, it is necessary to establish such periods as reporting and base. For the latter, it makes sense to take performance indicators either for the past or for the period in which the company received the maximum profit. Accounting for the base period is required to compare the profitability calculated in each of the mentioned periods.

Factors of decrease in profitability

Why is there a decrease in profitability?

The decrease in profitability revealed during the analysis can be caused by such trends as, for example:

Outpacing the growth rate, the rate of increase in revenue - the reasons that initiated this trend can be, in particular, lower prices, structural changes in the range of sales, an increase in standard costs. To change the situation, an analysis of the company's pricing policy, cost control system, and assortment policy is required.
Outpacing the rate of decrease in revenue of the rate of reduction in costs - a trend may arise due to a decrease in the level of . In this situation, a comprehensive analysis of the marketing strategy is required.
Increasing company costs - this trend can be caused by such factors as price reduction, increase in standard costs, structural changes in the range of sales. In this situation, an analysis of the assortment policy, pricing and cost control is required.

It should be taken into account that the decrease in profitability revealed during the analysis is an unambiguous evidence that the company's competitiveness is falling, and the level of demand is seriously reduced. In this kind of situation, the company needs to develop a system of procedures that provide active stimulation of demand, improve the quality of products, as well as intensive development of new market sectors.

It should also be noted that if the results of the analysis lead to conclusions about a decrease in sales volumes or an increase in assets involved in the turnover, then the ways to correct the current situation may well be enough to eliminate the causes.

However, if the main negative factor is a significant increase in costs, then any necessary corrective actions must be taken with the utmost care, since the source of cost reduction can end quite quickly. Therefore, in such a situation the best option there may be a reorientation to the production of some other product.

Increasing profitability

The situation of decreasing profitability cannot be considered acceptable and quite naturally requires correction, for which the company needs to take measures aimed at increasing profitability in every possible way.

To develop the right strategy, the company should take into account, for example, factors such as:

market fluctuations,
Change in consumer demand,
Analysis of the activities of competing companies,
Saving internal reserves.

After a comprehensive study of all the above factors, it is necessary, based on the conclusions obtained as a result, to proceed to practical implementation strategies and take concrete actions to correct the situation.

The main actions aimed at increasing profitability include:

Increase and modernization of production capacities.
Comprehensive control over the quality of products.
Development of an optimal marketing strategy.
Reducing the cost of manufactured products.
Proper motivation of personnel.

So, summing up all of the above, it must be emphasized that the indicators of profitability of sales are one of the fundamental criteria for assessing the financial and economic activities of the company. To improve all indicators, it is necessary to properly analyze all existing achievements and identify factors that hinder further development. After all the problems are identified and the causes of their occurrence are determined, measures should be carefully developed and taken to correct the negative trends in the development of the company.

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