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What profitability is considered normal in trading? Standard value of return on sales by industry

Calculation of the standard value of return on sales for industrial enterprises and other organizations is extremely important in the management of the company. Knowing these indicators, it is possible to conduct a qualitative economic analysis and improve the efficiency of the enterprise. If a company wants to maintain its position in the market or even improve it, then it is very important to carry out such calculations for short periods. This will not only allow you to better manage the organization, but will also make it possible to respond in a timely manner to any changes in the market.

Basic Concepts

Before you understand what the standard value of return on sales is, you need to understand what it is. In accounting, this concept means an economic indicator, by determining which one can determine the level of efficiency in the use of certain resources in an enterprise. Moreover, not only material assets are taken into account, but also natural and labor resources, investments, capital, sales, etc. More to the point in simple words, then profitability means the level of profitability of a business, its economic efficiency and the benefits it brings.

Thus, it turns out that if the profitability indicator is below zero, then such a business is unprofitable, and we urgently need to improve this indicator, find out what influenced the occurrence of this situation and eliminate the causes of the problem. The level of profitability is usually expressed in coefficients, but is expressed for profitability of sales as a percentage. Normative value can also indicate the efficiency of exploitation of the enterprise’s resources; with normal values, the organization will not only cover costs, but also make a profit.

Profitability indicators

When calculating all indicators, it is very important to pay attention to such a concept as the profitability threshold. This indicator, or more precisely, the period, actually stands for the division of the unprofitable and effective state of the company. It serves as a comparison to the break-even point, reflecting the point at which an unprofitable business became effective. To analyze the company's performance, it is necessary to compare actual profitability indicators with planned ones. In addition, the comparison uses data from past periods and indicators of competing companies. But the coefficients, or, as they are also called, sales indices, are determined by calculating the ratio total income to fixed assets and flows.

Main groups of standards

The standard value of return on sales and profitability can be divided into certain groups, namely:

Return on sales (profitability of the enterprise).
Profitability of non-current assets.
Return on current assets.
Return on personal capital.
Product profitability.
Profitability production assets and the profitability of their use.

Using these indicators, taking into account the company’s field of activity, one can determine its overall profitability. To determine the return on assets, it is necessary to determine the efficiency of exploitation of the company’s equity capital or its investment funds: it all depends on how the company’s assets bring it profit, how much of it, taking into account the resources spent on production. To calculate the return on assets, the ratio of profit for a specific period of time to the size of the enterprise's assets for the same period is used. The formula looks like this:

R assets = P (profit) / A (size of assets).

The same indicators are used in economics to calculate the profitability of operating production assets, investment investments and own capital. For example, joint stock company, you can find out how effective shareholder investments are in a given industry.

Profitability calculation

Return on sales (normative value) is an indicator of profitability, which is expressed in coefficients and is a display of the share of income for each cash equivalent spent. To calculate the profitability of a company's sales, the ratio of net profit to the amount of proceeds is calculated. Calculations are carried out according to the formula:

R cont. = P (net income) / V (revenue volume).

This indicator is directly influenced by the organization’s pricing policy, as well as its flexibility in the market segment where its products are used. To increase their own profits, many companies use various external and internal strategies, as well as analyze the activities of competitors, the range of products they offer, etc. There are no clear schemes, norms, or designations of profitability. This directly depends on the fact that the standard value of return on sales is directly related to the specifics of the organization’s activities. All indicators can only reflect the overall performance of the company for a specific period.

Basic formulas

In order to effectively manage sales and monitor the performance of the organization, calculations of the profitability of the enterprise are carried out. To do this, it is customary to use certain indicators, namely: gross and operating EBIT profit, balance sheet data, net profitability sales taking into account the gross income indicator, it shows a coefficient indicating the share of growth from each monetary equivalent earned. To calculate this indicator, take the ratio of net income after paying taxes to the total amount of funds for a specific period of operation of the organization. In other words, operating margin equals gross income divided by trading revenue.

It is worth noting that this coefficient must be included in the financial statements. But operating profit EBIT is equal to the ratio of EBIT to total revenue. Moreover, this indicator reflects the total income before all interest and taxes are subtracted from it. It is by this formula that the operating profitability of sales, the standard value in production, as well as other important values are calculated. It is believed that this coefficient lies between the overall profit data and the organization’s net earnings.

Profitability ratios

But the profitability of sales on the balance sheet is a coefficient, the calculation of which is carried out on the basis of data from accounting reports and represents a characteristic of the share of profit from the total revenue of the organization. This coefficient is calculated using the formula for the ratio of total income or loss from product sales to the volume of revenue. To get results, you just need to use ready-made data from the company’s balance sheet.

The calculation of net return on sales is carried out by the ratio of net profit after all payments to total revenue. To carry out independent calculations of the standard value of profitability of sales in trade, you need to find out how much product was sold and what income the organization received from this sale after paying all taxes, taking into account other expenses related to operating activities, but without affecting non-operating expenses .

Analysis of results

Thanks to all these formulas, the company’s specialists can calculate the most various varieties profits relative to total revenue. But still, the dependence on the specifics of the main direction of the enterprise’s work remains quite significant. If the return on sales, standard value and other coefficients have been calculated for several periods of the organization’s activity, then the company’s employees will be able to make a qualitative economic analysis. That is, these indicators will help to carry out operational management economic activity enterprises. In addition, this will allow you to quickly respond to fluctuations and changes in the market, which will undoubtedly help improve performance indicators and provide the company with a constant income.

Indicators reflecting the standard value of return on sales are used in calculations of operational activities. But it is not worth using them for long-term periods, since changes in the market occur quite often, and with such calculations it will not be possible to respond to them in a timely manner. They will help solve daily and monthly tasks, helping to make plans for the sale of manufactured products.

Increased profitability

There are ways to increase the standard value of profitability of sales. Among them, the most common are the following: reducing production costs by reducing the cost of producing goods and increasing the volume of goods produced, which will increase gross revenue. But in order to effectively use these methods, the organization must have sufficient labor and material resources. Again, to conduct such events, you need to work with highly qualified employees or increase the level of professionalism of your staff through various trainings and using new methods and practices of the global economy that improve the skills of workers.

In order to increase the standard value of return on sales based on net profit, it is important to study what positions the organization’s competitors occupy, what their pricing policy is, and whether they are holding promotions or other attractive events. And already having this data, you can analyze which factors are advisable to use to reduce production costs. Moreover, for analytical activities one should use not only data about competitors in the region, but also use information about the leaders of a given market segment.

Conclusion

To increase sales profitability indicators, the standard value for industries must be calculated using all the necessary formulas and an analysis of the obtained data must be carried out. It is worth considering that increasing the efficiency of an enterprise is influenced not only by its pricing policy, but also by the range that it can offer to its consumers.

Most often, the best solution to reduce product costs is to implement modern technologies into production. To understand whether this method will improve production, it is necessary to conduct an economic analysis and find out what costs are needed for this, how long it will take to develop new technology employees and how long will it take for this investment to pay off.

Wholesale trade – 10.5%
- retail – 3,6%
- construction – 6.7%

We should also not forget about such a criterion as a relatively low tax burden, which is noticeably lower than the average level for all business entities in a certain industry.

This can also attract increased attention from the tax authorities.

When calculating profitability, it is necessary to obtain two important indicators accounting: return on assets and return on sales. Then the obtained figures must be compared with the average level of profitability for your type of activity (main). Industry profitability is always indicated in special directories that are regularly published by Rosstat.

- influence of competition, etc.

Average profitability and tax burden

Many are familiar with the concept of assessing the risk of a tax audit, as well as the dependence of the magnitude of this risk on factors such as the size of the tax burden, almost equal amounts of income and expenses of the organization, or payment of salaries, the size of which is below the national average. Among these factors is the profitability indicator in the enterprise statistics. It is no secret that if it seriously deviates from the level of profitability calculated by the Ministry of Finance for a given area of activity, this will inevitably entail an inspection by the Federal Tax Service.

Profitability by type of activity

The Federal Tax Service publishes average profitability indicators on its official website.

So, today the current figures are the following values:

Wholesale trade – 10.5%
- retail trade – 3.6%
- construction – 6.7%

Profitability indicators by industry should be taken into account when assessing the risk of a tax audit of your organization. When conducting on-site tax control, inspectors quite often pay attention specifically to the organization’s profitability statistics, so this criterion can also be used by taxpayers who want to adjust the results of their financial and economic activities in order to reduce the risk of coming to the attention of tax inspectors. A significant deviation is considered to be profitability that differs by more than 10% from the indicators of similar industries and organizations.

We should also not forget about such a criterion as a relatively low tax burden, which is noticeably lower than the average level for all business entities in a certain industry. This can also attract increased attention from tax authorities.

Average profitability

When calculating profitability, you need to obtain two important accounting indicators: return on assets and return on sales. Then the obtained figures must be compared with the average level of profitability for your type of activity (main). Industry profitability is always indicated in special directories that are regularly published by Rosstat.

Experts consider the following to be significant factors influencing the amount of profitability:

Changes in the cost of raw materials;
- qualification level work force;
- too small or big size markups;
- presence or absence of discounts;
- influence of competition, etc.

A significant deviation from the level of profitability established for a specific area of activity will attract attention from the Federal Tax Service.

As can be seen from the presented material, the areas of activity in which there was a decrease in the level of profitability for 2017 (compared to 2016) were identified as follows:

– wholesale;
– production of electrical equipment;
- production Vehicle.

Spheres such as construction and transport remained at the same level (a small percentage decrease in profitability).

Please note that a significant deviation of the level of profitability from statistical indicators (established for specific types of activities) will attract attention from regulatory authorities. Tax authorities take into account the deviation of the level of profitability according to the company (accounting data) from the industry average of no more than 10%.

Similar conclusions can be drawn about the impact of the tax burden on the ratio, since an increase in taxes (except for indirect ones in cases where the burden of the tax burden is shifted to buyers) leads to a decrease in both net profit and assets of the enterprise, and the return on assets ratio decreases with growth taxes are similar to the return on equity ratio (except for the increase in indirect taxes passed on to buyers).

It should be noted that the size of the tax burden does not affect the volume of sales (i.e., the denominator of the coefficient), therefore, the result of an increase in taxes is a decrease in net profit (i.e., the numerator of the coefficient) and a decrease in the profitability ratio of sales.

Thus, an increase in the tax burden, leading to an increase in government revenues, causes a decrease in such important indicators financial stability commercial organization, as different profitability ratios (except for cases of growth of indirect taxes, which are reimbursed by buyers and in this case have practically no effect on the profitability of enterprises).

One of the economic indicators of the efficiency of organizing the activities of an enterprise is return on sales (hereinafter referred to as RP).

It allows you to determine how profitable the entire process from manufacturing to sales of manufactured products is for the company. This value depends on the indication of gross profit (hereinafter referred to as GP), revenue and other factors.

The concept of profitability and its main types

The RP indicator is very widely used in all sectors of the economy in order to find out how effectively the enterprise uses current costs.

This indicator is measured as a percentage, showing the ratio of profits to expenses. This coefficient shows what share it takes in each ruble earned after the sale of manufactured products.

Exists several types of RP depending on the parameters used when determining it:

by value before interest and taxes in each ruble of revenue;
according to VP indications (Operating Margin, Gross Margin, Sales margin,);
by net profit, part of which falls on 1 ruble of revenue (Profit Margin, Net Profit Margin).

Obtaining net profit is possible only if the company carries out expedient activities aimed at rational use of investments. The coefficient also depends on capital turnover and output volume.

What characterizes this meaning?

The RP parameter is an indicator of economic efficiency that characterizes the company’s profitability from production activities.

By its meaning carry out analysis about how rationally the organization uses its available production resources:

If the results of the activities of non-profit structures are analyzed, then this parameter will assess the overall effectiveness of their work. For commercial divisions in calculations important values are precise quantitative characteristics. RP is similar to efficiency, only the parameters in this analysis are the result obtained as a result of the activity, which is presented as the ratio of costs incurred to the amount of profit received. The more benefits received, the more profitable the production.

At enterprises, RP is an indicator of the organization’s pricing policy and competent cost control. Diversity in enterprise competitive strategies is encouraged big difference RP parameters in various companies. It is widely used to analyze the operational efficiency of organizations.

For information about what this indicator is, the rules and examples of its calculation, see the following lesson:

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Calculation procedure and rules

The RP indicator is calculated in order to to carry out analysis such factors:

dynamics of company development;
efficiency of production processes;
methods of product sales.

The RP value is usually calculated as the ratio of net profit, from which taxes have already been withheld, to the volume of proceeds received from sales for the same period of time.

By gross profit

The RP coefficient calculated using the VP parameter is called English language: GrossProfitMargin.

It is obtained by solving a simple formula - the ratio of VP to revenue:

RPval=VP/V,
where B is revenue.

This parameter shows the size of the VP’s share in kopecks contained in 1 ruble of proceeds.

By operating profit

The numerical value found as a result of the ratio of operating profit to the amount received after the sale of products is the RP for operating profit or also called Return on Sales (ROS).

The formula for determining this parameter is as follows:

where Ebit is operating profit. This value is obtained as the sum of two lines: 2300 “Profit (loss) before tax” and 2330 “Interest payable”;
Tr – proceeds after sales.

In English, operating profit sounds like Earnings before Interests and Taxes.

In this parameter, as in the previous case, you can immediately see the penny share of operating profit included in 1 ruble.

This parameter is an intermediate performance assessment coefficient between sales profit and net profit.

By net profit

The designation Net Profit Margin (Npm) belongs to the term net profit margin. It is determined as a result of the ratio of net profit to total revenue. In this case, they talk about RP, which shows what share of net profit falls on 1 ruble of revenue.

The formula looks like this:

Npm=Pr./Tr,

in which net profit (Tr) is determined by multiplying the price by the number of items sold from the output:

Tr=W*L,
W – price, L – number of units sold.

Net profit =Tr — Full cost– Expenses + Income – Taxes,

where are the indicators “Expenses” and “Incomes” arising from the non-core activities of the enterprise. These include exchange rate differences in currencies, transactions with securities, into the production of other enterprises through, etc.

Balance formula

Another option for calculating the RP indicator is a formula that uses balance sheet data:

RP = profit from sales / amount of revenue

RP = line 050 / line 010 f. No. 2,

where profit from sales is the value from line 050 in form No. 1 of the enterprise; the amount of revenue is reflected in line 010 in form No. 2.

Each of the above calculation options is used in one case or another to analyze the company’s sales activities.

Return on sales ratio

The share of net profit in total sales is determined using return on sales ratio(hereinafter KRP).

It is the most important among other indicators of a company's profitability. The indicator cannot have negative meaning and in line with the current inflation rate. In order for it to show a smaller error in countries with highly developed economies, the coefficient is correlated depending on the industry.

The formula for calculating the coefficient is as follows:

KPR = net profit/sales revenue.

This parameter can be calculated either for individual items (for example, for a specific product) or as a whole for total products. Calculations must be done quite often, because... This is important for organizing rational production at the enterprise, which allows you to stably maintain and increase the flow of profits.

Calculation example

To calculate the RP parameter required for analysis and find out how much net profit the company received from the sale of goods, you need to apply the formula. To make it easier to understand how to calculate RP, let's look at an example.

The company received total sales revenue for the year 2014 amounted to 15.85 million rubles, and in 2015 it increased to 17.51 ml. rub.

The net profit amounted to:

in 2014 – 3.8 million rubles;
in 2015 – 4.9 million rubles.

Do you need to determine how the RP has changed?

To answer, you must first find out the KRP for 2014 and 2015. To do this, let’s substitute the initial data into the formula for calculating the CRP given above:

KRP (2014) = 3.8/15.85 = 0.2397 or in terms of net profit RP (2014) = 23.97%.

KRP (2015) = 4.9/17.51 = 0.2798, respectively, and RP (2015) = 27.98%.

Now we need to clarify how the value has changed as follows:

RP (2015) - RP (2014) = 27.98-23.97 = 4.01%.

From the calculations it follows that in 2015 the profitability of sales increased significantly by 4.01%.

Analysis of the results obtained

By analyzing the value of return on sales, the management administration tries to find out how correctly the use of costs is organized in order to make a profit.

In many enterprises this analysis needed for the following:

stable revenue and increased profits;
control over the development of the company;
making comparisons with competing firms;
detection of profitable and unprofitable products, etc.

The management of the organization must carefully consider measures to increase profits and reduce losses in production activities. What to do if you need to increase your RP? What to do if profitability decreases? Regular monitoring and analysis of the RP level allows you to identify a lot of extremely important information. During the calculations, it becomes clear how production is developing, what needs adjustment, and what factors, on the contrary, do not require changes.

For each entrepreneurial activity There is no more important goal than constantly increasing your income. To do this, it is necessary to regularly calculate all options for determining profitability and record the results obtained.

The main source of movable capital is revenue received from the sale of products. Therefore, one of the main activities of the subject should be to increase the RP indicator by complying with the economy regime, reducing costs, rational use enterprise resources.

Due to the fact that the volume of costs for raw materials requires considerable investments, and increasing profitability implies reducing costs, it is necessary to rationally calculate the costs of purchasing materials. This will increase the KRP and increase profits.

Marketing market research will make it possible to establish an improved production of products similar to similar products from competitors and increase customer demand for their products.

Basic measures for use labor resources, influencing to increase profitability, such:

optimal use of workers employed in production;
increasing the skills and qualifications of working personnel;
optimization of costs for departments that are not involved in direct production of products;
use of automated mechanisms in production;
promoting staff interest in increasing productivity.

Main factors that may influence to reduce sales profitability, such:

Expenses are growing faster than revenue from product sales;
The decline in revenue outpaces the increase in costs;
There is a decrease in revenue against the background of increasing costs.

The first option is usually associated with an increase in corporate costs with a forced reduction in prices due to the onset of unfavorable market conditions. The second point is characterized by a drop in product sales.

And in the latter case there is a series factors influencing the decrease in RP. These include:

the need to reduce prices for manufactured products;
reduction in assortment due to the inability to stop the increase in corporate costs.

It is necessary to analyze these factors and reconsider economic policy enterprises in order to prevent and gradually increase the RP indicator.

Standard values of this indicator for Russia

RP depends on many factors. The highest indicators are in the trade and mining industries, and the lowest in heavy engineering.

For this parameter influence:

Industry;
Region;
Terrain;
Kind of activity;
Seasonality, etc.

According to statistics, in 2014 there were such profitability indicators:

The maximum number belongs to the mining sector (24-33%), and chemical production (16,7%).
Spheres big business show a decrease in profitability due to falling prices and consumption on world markets.
Enterprises in the small and medium segment of the economy showed a slight increase of about 0.9% of GDP.
Due to the turbulent geopolitical situation, the profitability of some industries has decreased, but nevertheless growth is observed and economists predict that retail trade could grow by 2.1% per year.

The rules and procedure for calculating profitability are discussed in the following video:

Profitability indicators allow you to evaluate the effectiveness of the organization. From the article you will learn what there are profitability indicators, how they are calculated and what they can tell you.

What is the essence and significance of the profitability ratio?

The main purpose profitability indicators— inform stakeholders about how effective the enterprise is. For example, to convey to the owners of the company whether the money invested in it is being used effectively; warn potential investors about the riskiness and inexpediency of investments or, conversely, confirm their attractiveness.

In addition, based on the analysis profitability indicators forecasts are made, growth reserves and ineffective costs are identified, and significant management decisions are made.

At its core profitability indicators are a relative expression of profit. They show what share profit takes in the amount of funds invested and used by the organization.

Formula for calculating the level of profitability

Profitability is the ratio of profit to the indicator whose profitability you determine. General profitability level formula looks like that:

R = P / X * 100%,

R - profitability,

P - profit,

X is the indicator whose profitability needs to be calculated.

Profitability is expressed as a percentage, so the result of division is multiplied by 100.

Among profitability indicators highlight:

return on sales is the ratio of profit to revenue;

return on assets - the ratio of profit to average cost assets (total, non-current, current, net or a specific type, for example, fixed assets);

return on capital - the ratio of profit to equity or debt capital;

profitability of products, works, services - the ratio of profit to costs, cost;

profitability of production - the ratio of profit to the average annual cost of basic and working capital industrial purposes.

See article .

These are just the most common ones profitability indicators, there are others, for example, personnel profitability.

Why do you need information about profitability levels?

First of all, information about profitability indicators the company itself needs to understand whether it is working well enough. There are no standard values here. Therefore, the calculated values are compared with the industry average. This can tell you whether a company is a leader in its field or is lagging behind its competitors and needs to urgently look for ways to improve efficiency.

Traditionally, the following types of activities are highly profitable in Russia:

mining - according to Rosstat for 2014, the profitability of the products of these enterprises is 36%;
fishing and fish farming - 33.2%;
real estate transactions - 23.5%.

Low profitability of products, works, and services in 2014 was observed in the financial sector - 0.7%, in retail - 2.2%, and in public services it is generally negative.

Dynamics profitability indicators over a certain period will show whether the business is developing or, conversely, there is regression.

Profitability indicators solve other problems as well. Thus, using factor models of profitability, it is possible to identify and assess the degree of influence of certain factors, both internal and external, on profit.

Results

So, we found out that there is a fairly wide range profitability indicators. Their calculation is based on the ratio of profit to the object (asset, resource, etc.) whose return needs to be assessed. And they all have one task - to provide the user with information about the profitability of the business.

Return on Sales Ratio in Excel

The level of economic efficiency of a financial, labor or material resource is characterized by such a relative indicator as profitability. It is expressed as a percentage and is widely used to evaluate the performance of a business enterprise. There are many types of this concept. Any of them is the ratio of profit to the asset or resource under study.

The essence of the concept of profitability ratio

The return on sales ratio shows business activity enterprise and reflects the efficiency of its work. Evaluation of the indicator allows you to determine how much money from product sales is the company’s profit. What matters is not how much product was sold, but how much net profit the company earned. Using the indicator, you can also find the share of cost in sales.

The return on sales ratio is usually analyzed over time.

Profitability assessment

A rise or fall in an indicator indicates various economic phenomena.

If profitability increases:

An increase in revenue occurs more quickly than an increase in costs (either sales volumes have increased or the assortment has changed).
Costs are decreasing faster than revenue is decreasing (the company has either raised product prices or changed the assortment structure).
Revenue grows, but costs become lower (prices have increased, the assortment has changed, or cost standards have changed).

The first two situations are definitely favorable for the company. Further analysis is aimed at assessing the sustainability of this situation.

The second situation for the company cannot be called unambiguously favorable. After all, the profitability indicator has formally improved (revenue has decreased). To make decisions, pricing and assortment are analyzed.

If profitability has decreased:

Costs grow faster than revenue (due to inflation, lower prices, increased cost standards, or changes in product mix).
The decline in revenue occurs faster than the reduction in costs (sales have fallen).
Revenue becomes less, and costs increase (cost rates have increased, prices have decreased, or the assortment has changed).

The first trend is clearly unfavorable. Additional analysis of the reasons is needed to correct the situation. The second situation indicates the company's desire to reduce its sphere of influence in the market. If a third trend is detected, pricing, assortment, and cost control systems need to be analyzed.

How to Calculate Return on Sales in Excel

The international designation of the indicator is ROS. The return on sales ratio is always calculated based on sales profit.

Traditional formula:

ROS = (profit/revenue) * 100%.

In specific situations, it may be necessary to calculate the share of gross, book or other profit in revenue.

Formula for gross return on sales (margin):

(Gross profit / sales revenue) * 100%.

This indicator shows the level of “dirty” money (before all deductions) earned by the company from the sale of products. The elements of the formula are taken in monetary terms. Gross profit and revenue can be found on the income statement.

Information for calculation:

In the cells for calculating gross profitability, we will set the percentage format. Enter the formula:

The gross profit margin indicator for 3 years is relatively stable. This means that the company carefully monitors pricing procedures and monitors the product range.

Operating profit margin (EBIT):

(Operating profit / sales revenue) * 100%.

The indicator characterizes how much operating profit is per ruble of revenue.

((Page 2300 + Page 2330) / Page 2110) * 100%.

Data for calculation:

Let's calculate the profitability of operating profit - substitute references to the required cells into the formula:

Formula for return on sales based on net profit:

(Net profit / revenue) * 100%.

Net profitability shows how much net profit is per ruble of revenue. Both figures are taken from the income statement.

Let's show the return on sales ratio on the graph:

In 2015, the indicator decreased significantly, which is regarded as an unfavorable phenomenon. Additional analysis of the assortment list, pricing and cost control system is required.

A value above zero is considered normal. The more specific range depends on the field of activity. Each enterprise compares its return on sales ratio and the standard value for the industry. It’s good if the calculated indicator practically does not differ from the inflation rate.

Return to Profitability 2017

– wholesale trade – 10.5%
— retail trade – 3.6%
— construction – 6.7%

We should also not forget about such a criterion as a relatively low tax burden, which is noticeably lower than the average level for all business entities in a certain industry.

This can also attract increased attention from tax authorities.

— change in the cost of raw materials;

— influence of competition, etc.

Average profitability and tax burden

Profitability by type of activity

The Federal Tax Service publishes average profitability indicators on its official website.

So, today the current figures are the following values:

– wholesale trade – 10.5%
— retail trade – 3.6%
— construction – 6.7%

What percentage of return is considered acceptable?

Average profitability

Experts consider the following to be significant factors influencing the amount of profitability:

— change in the cost of raw materials;
— level of qualification of the workforce;
— the markup is too small or large;
— presence or absence of discounts;
— influence of competition, etc.

A significant deviation from the level of profitability established for a specific area of activity will attract attention from the Federal Tax Service.

As can be seen from the presented material, the areas of activity in which there was a decrease in the level of profitability for 2017 (compared to 2016) were identified as follows:

– wholesale trade;
– production of electrical equipment;
– production of vehicles.

Spheres such as construction and transport remained at the same level (a small percentage decrease in profitability).

Thus, an increase in the tax burden, leading to an increase in government revenues, causes a decrease in such important indicators of the financial stability of a commercial organization as various profitability ratios (with the exception of cases of growth in indirect taxes, which are reimbursed by buyers and in this case have virtually no effect on the profitability of enterprises).

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