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Profitability of the organization. Enterprise profitability level: assessment and methods of increase

Futures or futures contract are one of the most popular instruments on the stock exchange. Futures trading occupies a significant segment of the exchange market.

The secret to the popularity of this financial instrument lies in its high liquidity and the ability to choose from a large number of investment strategies. For novice traders, this segment of exchange trading seems complex and risky, but for experienced players it offers many opportunities, including hedging risks.

Futures contract. What it is?

So what are futures? The term comes from English word future, meaning "future". This emphasizes the fact that the contract is concluded for the actual completion of a transaction in the future.

Futures contract is an agreement in which the current market price of a commodity or asset is fixed, but the transaction itself will be carried out on a specific date in the future

The essence of the agreement is that the parties to the transaction come to a common opinion on the price of the goods and at the same time agree to defer payments under the contract. This type of agreement is very convenient for each of the parties, since it insures against situations when some serious changes in the market situation provoke fluctuations in market prices.

The purpose of such a contract is to attempt to reduce risks, maintain planned profits and obtain a guarantee of delivery of goods. A futures contract relieves a market participant from urgently searching for someone to sell or buy a commodity from. The exchange acts as a guarantor of fulfillment of the terms of the transaction.

Example of a futures contract

A traditional example of a futures contract would be a transaction between an agricultural producer and a buyer. The farmer speculates how much he wants to sell his goods for in order to recoup the costs of growing and make a profit. If this amount is approximately equal to the current market value, he signs a futures contract with the buyer for the supply of agricultural products at the current price, but after a certain period of time - for example, 6-9 months, that is, as long as it takes to grow the crop.

If the price of products falls during this time (for example, the year will be fruitful and there will be an oversupply of products), the manufacturer will nevertheless be able to sell the goods at the price specified in the contract. But even in the opposite situation, if there was a bad year and product prices rose, the manufacturer will have to sell at a price that is now unprofitable, but pre-specified in the contract. The whole essence and meaning of a futures contract is to fix the price of a commodity.

The assets of a futures transaction, in addition to real goods, are stocks, bonds, currency pairs, interest rates, stock indices, etc.

Futures trading. What are the advantages?

The high popularity of futures on the stock exchange is not accidental; the advantages of this financial instrument are as follows:

The ability to widely diversify a trader’s securities portfolio due to access to a large number of instruments.
High liquidity of contracts and the ability to choose different financial strategies: risk hedging, various speculative and arbitrage operations.
The commission for purchasing futures is lower than on the stock market.
A guarantee of usually no more than 10% of the value of the underlying asset allows you to invest not the full value, but only a part, in futures contracts, but at the same time use the leverage that arises when using a futures contract.

However, the investor needs to keep in mind that the amount of the collateral may vary throughout the entire life of the contract, so it is important not to lose sight of futures quotes, monitor these indicators and close positions on time.

The futures price is also unstable. Its fluctuations allow you to track the futures chart. During the circulation period, the value constantly changes, although it depends directly on the value of the underlying asset. The situation when the futures price exceeds the value of the asset is called “contango,” while the term “backwardation” means that the futures turned out to be cheaper than the underlying asset. On the expiration date, there will no longer be such a price difference between the futures and the asset itself.

Types of futures contracts

There are two main types of futures contracts: settlement and delivery.

Futures contracts gave birth to the commodity market. The participants in the transaction agreed on a price that suited both parties and on a deferred payment. This type of transaction guaranteed both parties protection from abrupt changes market sentiment. Therefore, initially only supply contracts were in force, that is, those involving the delivery of real goods.

On the current Russian derivatives market there are delivery contracts that ensure the delivery of shares directly, but there are quite a few of them. These are futures for shares of Gazprom, Sberbank, Rosneft, for some types of currencies and options

Today, futures contracts are primarily settlement contracts and do not impose an obligation to deliver commodities. Traders prefer to trade assets that are more convenient for them (currencies, RTS index, shares, etc.). The fundamental difference between settlement futures and delivery ones is that delivery of the commodity or underlying asset does not occur on the last day of the contract. On the expiration date, profits and losses are redistributed between the parties to the contract.

The conditions for concluding a futures contract are standard, they are approved by the exchange. In addition to this scheme, personal conditions (or specifications) are prescribed for each asset, which includes the name, ticker, type of contract, size/number of units, date and place of delivery, method, minimum price step and other nuances. More detailed specifications of any futures on the Forts market can be found on the Moscow Exchange website.

The difference between futures and options is that the former oblige the seller to sell an asset, and the buyer to purchase an asset in the future at a fixed price. The guarantor of the transaction in both cases is the exchange.

Today, exchange trading experts recognize that in many ways it is futures contracts that set the pace for economic development, setting the bar for supply and demand in the market in advance.

Content

The need for the emergence of an exchange market was predetermined by trade relations. With the development of exchange trading, financial trading instruments were improved and new ones emerged, with the help of which trading now takes place and contracts are concluded.

What is a futures transaction

Futures transactions are a future agreement between the buyer and seller of an asset on the price of the subject of trading (asset) on a specific date, which may not imply mandatory delivery, but guarantees payment. The place where the transaction is concluded is the financial exchange, to which the obligations of fulfilling the agreement of both parties are transferred. The main indicators of the transaction are only the price of the underlying asset and the date. All other necessary indicators are entered in advance into the specification, which contains the following contract indicators:

full name and abbreviated name (conditional);
unit of measurement and quantity;
validity period and delivery date;
minimum price change and minimum step size.

Why do we need futures?

Exchange financial transactions are concluded for a specific purpose. The prototype of this type of contract were simple trade agreements, which were concluded for a certain period, and the price was agreed upon at the beginning of the transaction. The emergence of these types of contracts was caused by the need for manufacturers or other parties to the contract to insure themselves against price fluctuations.

For example, a farmer, planning to grow and harvest grain crops, invests in seeds, fertilizers, and makes other production costs, wants to eliminate the risk of losses from selling the crop, and wants to make a profit regardless of the amount of supply and demand. Manufacturers who enter into contracts for the supply of products want to eliminate the risks of currency fluctuations and receive the money after a certain time. After a futures transaction is completed, the contract price cannot change even if the currency exchange rate changes significantly.

In order to insure against fluctuations in the price of the underlying asset in the future, a fixed price is set for a certain date - hedging occurs. Another purpose of stock trading is speculation. Transactions are concluded between speculators to obtain planned profits from possible price movements. Sellers bet on a decline, and buyers bet on an increase.

Futures contract participants

Concluding a transaction presupposes the presence of a seller and a buyer, but they pursue different goals. The seller - the hedger - uses the futures market to reduce the risk of price changes. The trader plans to make a profit from predicted price changes, from buying an asset cheaper and selling it at a certain time at a higher price. The futures market cannot exist without the participation of traders; there are two types: local and brokers. Local traders make purchases and sales on their own (they make money on price differences), brokers make transactions on behalf of their clients.

Types of futures

The transaction assets include not only goods, but also currencies, stock indices, interest rates. The following types of futures are distinguished:

Deliverable. It involves the obligatory delivery by the seller to the buyer of products (wood, coal, metal, gold, oil, grain) on a date specified in the contract at a specified price. If the goods are unavailable after the end of the contract, the seller pays a fine to the exchange.
Settlement. The contract does not provide for deliveries; only settlements take place between the buyer and seller. The settlement amount is determined as the difference between the price specified in the contract and the actual (current) price established at the end of the transaction.

How futures work

Both types of transactions - delivery and settlement - are a derivatives contract. Futures – what is it? This is a security for a portion of a product (asset), which is purchased for a certain period (future). After the end of this period, trading on the previous security ceases, and settlement occurs between the parties to the contract. Three calculation options are possible:

The price of the underlying asset has not changed – participants do not make settlements.
The price has increased - the buyer’s account is replenished, the seller’s account is reduced.
The price has decreased - the buyer's bill decreases, the seller's bill increases.

Execution of a futures contract

After a transaction is concluded, the exchange is responsible for its execution. What are futures and how do they differ from options? Options allow for the possibility, provide the right to buy and sell, and a futures contract assumes that the participant is obliged to buy or sell an asset - to make a settlement. The execution of a futures contract is guaranteed by the collateral paid by the parties - security that is returned to the participants at the end of the contract or serves as a source of covering the losses of one of them.

How to trade futures

Trading futures for beginners has several advantages:

The instrument is highly liquid.
Trading during the day lasts a long time - transactions are carried out from 10-00 hours to 23-45 hours.
Low commission.
With the help of built-in leverage, you can earn money by paying not the full value of the contract, but only a part (unlike shares, which are purchased at full value).

You need to remember the expiration date of the contract so as not to be stuck with it after the expiration date. Mostly, the validity of the security lasts from one month to three months, there are long-term ones - up to nine months. You can sell a futures contract before its expiration date. It is better to do this closer to the end of the contract, on the day when you can make a profit. There are days when, after a price change, the collateral is not enough - it needs to be increased, otherwise the position will be closed at a loss.

Futures exchanges

Futures trading on the exchange is used primarily for speculation, only a small part of transactions is carried out for hedging purposes. The participants do not make settlements among themselves; they are carried out by the exchange clearing house, for which they receive a commission from the seller and buyer. For settlements, the chamber uses information provided by clients warranty coverage.

Futures price

The indicator of the concluded contract is the price of the underlying asset. For a real product, a fixed price is set for hedging. It differs from the commodity market price because the market price is determined by the relationship between supply and demand. For settlement securities, the futures price is calculated in rubles. The index price of a transaction in rubles is determined by multiplying the components: the cost of one point, its price, and the current exchange rate.

Derivatives market in Russia

Securities trading in Russia is carried out by:

Moscow Exchange;
Stock Exchange of St. Petersburg.

The Russian futures market is diverse; it sells securities in:

company shares;
credit interest rates;
bonds;
indexes;
products (grain, oil, electricity, sugar, metals);
currency pairs (euro/dollar, euro/ruble, dollar/ruble).

Futures on Sberbank shares

Securities are traded on the Forts derivatives market. You can purchase Sberbank futures at Forts yourself. To do this, you need to enter into an agreement with a trading broker and connect a terminal to work online. To trade on the financial exchange, you need to listen to the opinions of experts, follow the chart, news, make your own analysis, conclusions, and forecasts. Analysts claim that in this moment Sberbank shares are undervalued and need to be bought. Currently, the security guarantee is 1,300 rubles, the lot size is 100 shares, and the cost per step is 1 ruble.

Oil is a sought-after raw material all over the world. Petroleum products are used in all areas of our lives, so oil futures are highly liquid. On the oil exchange market, currently only a portion of securities are purchased for investment, about 90% are purchased for speculation. You can trade on the Moscow Exchange using a connected terminal.

Brent oil securities (market code futures BRJ6) are popular on the Russian oil exchange market. With a leverage of 1 to 6 and a lot size of 10 barrels, you can start trading with 7,000 rubles. Futures prices in last years decreased fourfold, but the number of purchases of securities decreased only by 19%. The decrease in sales volumes is explained by less attractiveness for speculation.

Futures Si

Currency futures are an exchange-traded hedging instrument. When concluding an agreement for the supply of goods with deferred payment for a certain period, the supplier uses a security to fix the value of the currency. Most contracts are concluded for the purpose of speculation. Trade takes place currency pairs. The most liquid on Russian stock exchange is the pair American dollar/ Russian ruble with code Si. The most popular pairs are: euro/dollar, euro/ruble.

Gazprom futures in Forts

It is more profitable to buy futures on Gazprom shares than the shares themselves, because with the help of the built-in leverage of 1 to 8 you can purchase more shares for the available amount of money. The profitability of such investments is eight times greater, but the loss also increases eight times for equal investments. For exchange trading, it is necessary to monitor the terms of contracts provided by charts, expert forecasts, and news.

Futures on the RTS index

Securities on the RTS index were launched to hedge the Russian stock market. Now they are highly liquid and are used for speculation. You can purchase index futures online. After the name of the index, the end date of the contract is indicated through a dash. The last trading day of the month for concluding a contract is considered to be the number 15 or the next working day after the weekend.

Video: futures collateral

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Every hunter wants to know where the pheasant is sitting. This children's saying perfectly describes the activities of an investor. Every asset owner wants to know where the profits are hidden. In the conditions of rapid development of the investment market, it is difficult for an unprepared person not to lose money.

Professionals use a whole range of economic indicators to assess risks and performance. The key concept in the analysis of investment projects is profitability. There are terms such as yield on bonds, stocks, investments, capital.

The concept of profitability

Profitability is a concept used by investors to evaluate the performance of investment operations. That is, this is the amount of profit that will remain with the investor after deducting all costs and expenses. Profit in this case is the sum of current income for a certain period and capital gains for the same period. Thus, the profitability formula can be presented as:

Dokh = PP / SV * 100%, where:

Doh is the yield;
PP - profit for the period;
SV - sum investment investments.

Since profitability is usually determined in percentage to the amount of investment, then the profit divided by the amount of investment must be multiplied by 100%

Example of profitability calculation

Illarion Genrikhovich owns real estate - a house worth 1 million rubles. He decides to rent it out. Illarion Genrikhovich set the rental price at 30 thousand rubles. How to determine profitability for the year? According to the formula:

Profitability = 30,000 * 12 / 1,000,000 * 100%.

The return on Illarion Genrikhovich's investments will be 36%. Thus, profitability shows the return on investment as a percentage.

How to determine whether Illarion Genrikhovich made a good investment or not?
Profitability assessment must be approached logically. First of all, it is necessary to evaluate all costs of purchasing and capital turnover. Illarion Genrikhovich purchased the house for 1 million rubles - these are his expenses. Profit for the year amounted to 360 thousand rubles (30 thousand rubles * 12 months).

At first glance, it may seem that a yield of 36% is remarkable. But in fact, Illarion Genrikhovich, having spent a million rubles, did not recoup his investments in a year.

There is one rule to follow when evaluating investments. Positive dynamics in investor activity occurs when the condition is met that the return is >100%.

That is, Illarion Genrikhovich’s investments will become profitable only when their profitability exceeds 1 million rubles.

Income and profitability

Before we begin to study the types of profitability and the factors influencing this very profitability, it is necessary to separate the concepts of “income” and “profitability” that are quite close in meaning. You can often find people, especially new traders, who mix these two terms and get confused.
Income is the amount of money received as a result of some activity for reporting period time. As applied to investment activities, income is the amount of benefit received after closing a position in monetary terms.

For example, a trader purchased a share of OAO Gazprom for 150 rubles. Before the close of trading, he sold this share for 450 rubles. His income was 300 rubles (450 rubles - 150 rubles) per day.

Profitability is the amount of change in the value of an asset relative to its original cost over a certain period of time, expressed as a percentage. For example, a trader purchased a share of OJSC Gazprom for 150 rubles and 4 days later sold it for 300 rubles. The return on investment per day will be 25%. In order to calculate it, you need to represent the value of the asset (share) as 100%. The share was sold for 300 rubles, that is, for 200% of the original cost. Thus, we subtract from 200% - 100% the initial cost (costs) and get 100% profitability in 4 days. We divide everything by 4 and get an average return of 25% per day.

Factors influencing profitability

According to their structure, factors influencing profitability are divided into external and internal. The latter relate to the enterprise and directly to production. External factors are a set of factors that cannot be influenced.

External factors

These include:

political situation in the country and in the world;
prices for foreign raw materials and supplies;
market relations and level of economic development;
demographic picture;
degree of inflation;
solvency of people;
climatic conditions and so on.

External factors primarily influence prices, product sales volume, and cost of materials.

Internal factors

The main internal factors include:

decline and increase in production;
decrease in sales volumes or their increase;
changes in product prices;
reduction and increase in production costs;
changing the product transportation process.

All factors, to a greater or lesser extent, affect the profit of the enterprise, and therefore can affect the amount of profitability.

Types of profitability

To assess the level of costs invested in business activities, profitability is used. There are the following types of profitability:

1. Internal - the rate of return at which the net present value is zero, expressed as an interest rate.

The internal rate of return is determined using the equation:

0 = ∑ NPD/(1+ND), where

NPD - pure cash flow during the period;
ND - rate of return.

2. To maturity is the yield on the bonds of the owner who holds the bonds until they mature.

It is calculated in the same way as the internal rate of return:

0 = ∑ NPP/(1+ND).

3. Current is the volume of coupon payments for 12 months, divided by the current value of the bonds. This type is used for stocks and bonds and allows you to compare several bonds or stocks.
Calculated by the formula:

TD = (NS * SK) / RS, where:

TD - current yield of the stock (bond);
NS - nominal value (initial cost);
SC - coupon rate;
RS - market value of shares (bonds).

4. Dividend is the yield of shares, reflecting the ratio of the dividend on a share to the value of the share itself.
The dividend yield of a stock is calculated using the equation:

DD = D / CA * 100%, where

DD - dividend yield;
CA - share price;
D - dividend received on the share.

Return on capital

Return on capital is usually measured on an annual basis, but for long-term investments the return on capital is more appropriate.

Dk = TD + PC / Nper, where

Dk - return on capital;
TD - current income for a certain period;
PC - capital gain for a certain period;
Nper - initial capital.

Bonds and their yield

In order to determine the yield of bonds, it is necessary to consider the concept of “bond”, which is one of the main instruments of the investment stock market.

A bond is a type of security that confirms the debt relationship between the lender (the owner of the bond) and the borrower (the one who issued the bond). Essentially, buying a bond is buying debt. So why buy other people's debts?

Bonds have 2 prices:

Nominal. This is the price when the bond is issued, which must be returned upon the expiration of the bond term.
Market. This is the price at which that bond trades on the stock exchange.

On market price affects, first of all, the reliability of investments. This means that during the turnover process, securities either rise in price or fall. As the bond matures, its value decreases significantly.

The current yield on a bond can be calculated using a simple formula:

Dtek = (D/K) * 100%, where:

Dtek - current bond yield;
D - income;
K is the bond rate.

Stocks and their returns

A share is a type of security that provides its owner with a portion of the company's profits. Profits are usually paid out in the form of dividends. Such income can also be received in the form of a margin if the market value of the paper increases.

Shares have a nominal, issue, book and market value. Each of them has its own characteristics:

The nominal value is indicated on front side stock. The total amount of the company cannot exceed the amount of the authorized capital.
The issue price reflects the price of a share when purchased by its first holder, after its placement on the stock market.
Book value is the result obtained by dividing a firm's book value by the number of shares outstanding.
Market value is the price at which a stock trades on the secondary market.

Stocks have their own returns. This value is an indicator that allows you to estimate the amount of profit received during the ownership of the share from the moment of its purchase.

The profitability of a stock can be calculated using the formula:
Dakts = SK - PC / PC, where:

DAC is the return on the stock;
SK - total capital received since the purchase of shares;
PC - the initial capital that was invested in the acquisition of shares.

Any security has its own profitability. It can be calculated using the above formulas. But how can you find out about the profitability of securities purchased on the secondary market a week, an hour, a year ago? Is there a way to find out how much profit the purchased shares brought to their owners? For this purpose, security yield ratings were created.

Profitability and rating

The yield rating is a rating of securities that have brought their owners the greatest profit over the previous period (usually a year). It is compiled based on data stock exchanges Worldwide. The assessment of the investment attractiveness of shares (bonds) is taken into account. According to this assessment, securities are assigned a rating index from A+ to C-. A+ is highest quality, and C-, therefore, very low quality. The rating reflects the security's reliability, profitability and dividend payout. The rating index from A+ to C- was developed by Standard and Poor's Corporation.

In fairness, it is worth mentioning that it is quite common to see profitability ratings in professional printed publications, but this does not mean they are reliable. These are only competent expert opinions.

But it is better for novice investors to use such ratings as a cheat sheet. In most cases, securities from such lists do not bring high returns. But this is almost always a win-win for those who are not chasing super-profits, but want to preserve their capital and even increase it a little. Such ratings often include preferred shares. In addition, the rating allows you to evaluate securities over time, view their history, analyze the benefits of an acquisition, etc.

Risk and return

Profitability is effective method qualitative and quantitative assessment of investments. It has its pros and cons. But it is an indispensable tool when analyzing the rationality of investment. The yield has wide application in economic analysis, allowing you to weigh the decision on the need for investment. Often used in conjunction with risk indicators. When deciding on cash injections, an investor puts possible risks on one side of the scale, and the possible return on capital on the other. And if the second cup significantly outweighs, then the decision is made in favor of the investment.

We can say that profitability and risks are equilibrium concepts. They are always interconnected. The unspoken law of traders: the higher the risk, the higher the profitability. Every trader strives to reduce, calculate risk and increase profits.

This is how it works stock market. Every investor makes calculations and finds out where the profit is hidden.

How to assess the level of profitability using the analysis of absolute and relative indicators?

How to conduct a detailed analysis of the cost structure by cost item?

How to increase the profitability of an enterprise?

The profitability of an enterprise is an indicator that directly affects profit, i.e. final result activities of any enterprise. Increasing the profitability of an enterprise is one of the main goals of the management of any enterprise. There are many ways to increase profitability; each enterprise chooses the most suitable for a particular enterprise. Let's consider the main methods of increasing profitability and see what impact they have on the final result of financial and economic activities.

In order for an enterprise to be profitable and have a stable position in the market, it is necessary:

produce products that are in demand. You can produce a lot of products, but if there is no demand for it, then there is no point in such production;
sell products at a price that corresponds to the average market price and at which potential consumers are willing to purchase these products. To set such a price, enterprise specialists must study the sales market, potential consumers, their needs and payment abilities, the competitiveness of the enterprise and competitors’ prices for similar products;
produce products in the quantity required by the market so that the product does not sit in the warehouse, especially if it has a limited shelf life;
produce products with a rational calculation of production costs. When production costs exceed revenue from product sales, production is considered unprofitable and unprofitable; it does not make a profit. This could lead to bankruptcy.

Assessing the level of profitability

Assessing profitability involves analyzing absolute and relative indicators characterizing its level.

The absolute indicator is profit. Due to it, the enterprise can increase the wage fund, expand and increase production turnover, finance other areas of activity, etc. IN general view profit is the difference between the cost of selling a product and its cost (the sum of all costs spent on the production of this product).

The amount of profit can be found from the data financial statements, namely from the financial results report (form No. 2).

Let's look at a fragment from the financial statements for 2016 of Alpha LLC, which produces chairs (Table 1).

Table 1

Financial results report for 2016

Index	Meaning
Index	Meaning
Sales volume, pcs. (units)
Price per unit, rub.
Revenue, rub.
Costs (cost of sales), rub.
Gross profit(loss), rub.
Profit (loss) from sales, rub.
Other expenses, rub.
Profit (loss) before tax, rub.
Current income tax (20%), rub.
Net profit (loss), rub.

So, the revenue of Alpha LLC for 2016 was from the sale of 4,640 chairs at a price of 24,000 rubles per unit. — 111,360 thousand rubles. Production and sales costs amounted to 89,494 thousand rubles.

We subtract the full cost from the revenue and get a profit from sales - 21,866 thousand rubles. Net profit (less taxes and other expenses, the main indicator of the effective functioning of the enterprise) is equal to 17,493 thousand rubles.

When looking at absolute numbers, net profit isn't the only thing worth looking at. No less important is the ratio of sales revenue to production costs.

If the level of product costs and revenue from its sales are approximately equal, the enterprise will receive little profit, so it must strive to obtain more revenue at lower costs. Thus, we can conclude that an enterprise can be considered profitable if its revenue from sales of products is sufficient to cover all costs of production and sales of products and to create a difference, i.e. profit.

After absolute profitability indicators, we analyze relative indicators - profitability, i.e. indicators economic efficiency activities of the enterprise.

Product sales profitability (ROM, Returnon Margin) - the ratio of profit (loss) from sales to cost.

In our case ROM= 21,866,258.36 / 89,493,741.64 × 100% = 24.43%.

Important!

The higher the profitability of product sales, the more efficient the production and sales of products, which means the higher the competitiveness of the enterprise. To increase this indicator, it is necessary to reduce the cost of production and sales of products and increase sales volumes.

Return on sales (ROS, Margin on sales) is the ratio of profit (loss) from sales to revenue.

In the example under consideration ROS= 21,866,258.36 / 111,360,000.00 × 100% = 20%.

As we can see, the values of the profitability and competitiveness indicators of the analyzed enterprise are quite large (the minimum minimum profitability is 5%).

The cost includes all the costs incurred by the enterprise for the production of these products and their sale. They are grouped into two large categories: conditionally permanent And conditional variables.

The first (Table 2) do not depend or weakly depend on the volume of production (for example, depreciation charges, rent for premises, wages of personnel not related to production, purchase of office supplies, information and consulting costs, expenses for telephony, Internet, etc. ), the latter (Table 3) directly depend on volume, i.e. they either increase with an increase in production volume, or decrease with its decrease (for example, costs of raw materials, wages of main production workers, etc.).

table 2

Conditionally fixed expenses for 2016

Index	Value, rub.
Index	Value, rub.
Rent
Public utilities

Depreciation deductions
Labor costs
Insurance premiums
Total	16 850 180,04

The amount of semi-fixed expenses for 2016 is RUB 16,850,180.04. Regardless of changes in production volume, it will remain at the same level.

Table 3

Conditionally variable expenses

Index	Cost per unit, rub.	Total
Sales volume, pcs. (units)
Material costs, rub.
Expenses for remuneration of main production workers, rub.
Total	15 655,94	72 643 561,60

Taking into account the standards for the consumption of materials and the cost of remunerating the main production workers per chair, the amount of semi-variable costs for the entire volume of production (4640 units) was calculated - 72,643,561.60 rubles.

The sum of semi-fixed (RUB 16,850,180.04) and semi-variable expenses (RUB 72,643,561.60) gives a cost estimate full cost(RUB 89,493,741.64; see also Table 1).

Let's calculate the permissible production volume at which the enterprise will cease to be profitable, but will not become unprofitable - break-even point.

The break-even sales volume is 2,019 chairs. With such a quantity, the enterprise will receive neither profit nor loss, and only starting from 2020 units. the company will begin to make a profit. IN in this case the amount of semi-fixed (16,850,180 rubles) and semi-variable expenses (15,655.94 × 2019 = 31,609,342 rubles) is approximately equal to the amount of sales revenue (2019 × 24,000 = 48,456,000 rubles), namely in this situation there will be neither profit nor loss.

The difference between the planned sales volume and the break-even is called strength threshold. In our example, this is 2621 units. It is necessary to monitor this indicator and not allow it to approach zero.

At this point, we cover all expenses - both semi-fixed and semi-variable, and each next unit of production sold will bring approximately 8,344 rubles. profit (24,000.00 - 15,655.94).

For greater clarity, let’s draw up a break-even chart based on the initial data (Table 4).

IN this chart The values of costs (total, variable) and revenue are located vertically, and the values of sales volume are located horizontally. The graph shows that with a value of 2019 units. the lines of revenue and total costs intersect, which indicates that at this point their values are equal.

For all sales volumes below 2019 units. the cost line exceeds the revenue line, therefore, the enterprise is unprofitable; at values above 2019 units. the revenue line exceeds the cost line - the enterprise makes a profit.

Methods to increase profitability

The main factors that a company can influence are: increase in sales, increase in unit selling price And cost reduction.

Option 1

We will increase sales volume from 4640 units. up to 5,000 chairs per year, subject to demand for such a quantity in the sales market and maintaining the current number of employees without expanding production.

Revenue = 5,000 × 24,000 = 120,000,000 rub.

Conditionally fixed expenses = RUB 16,850,180.04.

Conditionally variable expenses = 5,000.00 × 15,655.94 = 78,279,700 rubles.

Profit from sales = 120,000,000 - 16,850,180.04 - 78,279,700 = 24,870,119.96 rubles.

Conclusion

By increasing the sales volume by 360 chairs and maintaining the same selling price per unit, we received an additional profit of RUB 3,003,861.60.

Option 2

We will increase the cost per unit of production to 25,000 rubles. Other than that equal conditions the situation will be similar to the previous one. Revenue will increase and amount to RUB 116,000,000. (25,000.00 × 4640) while maintaining the same level of conditionally fixed and conditionally variable costs.

Conclusion

In this case, the profit will be 26,506,258.36 rubles. (116,000,000 - 89,493,741.64), which exceeds the profit value at a unit cost of 24,000 rubles. for 4,640,000 rubles.

Both in the case of an increase in sales volume and in the case of an increase in price, it is necessary to take into account the nuances. There are no guarantees that, for example, the enterprise will be able to realize the increased production volume - it is quite possible that the market does not need such quantity. And then the enterprise, which has already spent funds on production more products, which, moreover, could not be sold, will be forced to bear the costs of organizing/renting a larger warehouse for finished products. And if the products are perishable, the enterprise will also incur losses with such an increase in production. To avoid such situations, you need to carefully analyze the market and potential buyers.

As for the increase in the price per unit of production: when, other things being equal, the properties of the product (quality, design, etc.) its cost increases, buyers may refuse to purchase the product. This situation can also be aggravated by comparison with competitors' prices.

We found that the profitability of any enterprise is affected by changes in the balance of unsold products, as is the case with an increase in production volume with a constant sales volume. The remainder (360 units that will not be sold) is an incomplete receipt of revenue, therefore, no profit received from the funds already spent on the production of these 360 chairs.

To increase the level of profitability and profitability, the enterprise needs to reduce the balance of unsold products.

And finally, we move on to the most common way to increase profitability - reducing production costs. To reduce production costs, enterprises often develop methods and programs to implement certain measures. But first you need to study the cost structure item by item and determine specific gravity each article (Table 5).

Table 5

Composition and cost structure

No.	Index	Value, rub.	Share, %
No.	Index	Value, rub.	Share, %
	Rent
	Public utilities
	Telephone and Internet expenses
	Depreciation deductions
	Labor costs for management personnel and engineers
	Insurance premiums for management personnel and engineering staff
	Material costs
	Labor costs for key production workers and insurance premiums
Total		89 493 741,64

In the price structure, the largest share is occupied by two cost items - “Material costs” and “Costs for remuneration of main production workers and insurance premiums.” It is rational to start reducing production costs with them.

Ways to reduce costs under the item “Payment costs for key production workers and insurance premiums”:

reduce the number of employees (for example, by automating some processes);
reduce the level wages. But this may entail the departure of highly qualified specialists. Therefore, various motivation systems and progressive remuneration systems are usually used so that production workers perform a larger volume of work for the same level of wages.

Option 3

We will reduce the number of key production workers by 10 people, subject to the automation of some production processes.

The total number of employees before the reduction was 80 people.

On average, per year for each person under the item “Expenses for remuneration of main production workers and insurance premiums” there are 617,940.12 rubles. (with an average salary of about 50,000 rubles). In the event of a reduction in numbers, expenses under this item will be equal to RUB 43,255,808.40.

But at the same time, new equipment will be purchased for automation, which will increase the cost item “Depreciation” by 10% and amount to 57,015.68 rubles.

Conclusion

The cost will be 83,319,523.68 rubles, profit - 28,040,476.32 rubles.

The labor cost item was reduced by 7%.

The most important area of cost reduction for material-intensive industries is savings under the cost item “Material costs”:

introduction of new technologies;
application waste-free technologies or use of production waste;
purchase of cheaper raw materials;
change of raw material suppliers;
discount system from a regular supplier of raw materials.

The most common ways to reduce costs under the item “Material costs”:

reducing the purchase cost of raw materials by concluding contracts with manufacturers directly, bypassing intermediaries or shortening their chain;
purchasing materials in large quantities. In this case, you can get a discount from the supplier and save on transportation costs. But for this, the company must have free cash- for the purchase of large quantities and storage of these stocks. Therefore, it is imperative to compare the costs of placing large quantities of materials with the benefits of their acquisition;
independent production of some materials. But there are pitfalls here too: independent production is not always profitable and it is often more expensive to produce it yourself than to buy a finished product from a supplier;
purchasing cheaper raw materials is the most common way to reduce material costs. At the same time, it is worth paying attention to the quality of the purchased raw materials: with such a reduction in costs, the quality of the finished product may suffer, and this can lead to a loss of demand and, as a result, a decline in profitability.

Option 4

The company purchases cheaper raw materials.

For 1 chair, raw materials and materials are consumed for 5001.80 rubles. (Table 6).

According to the analysis conducted by the logistics department, it is possible to change some suppliers with a more favorable pricing policy, as can be seen from table 6 (columns 7-8 of table 6). Then the cost per unit of production will be reduced by 356.00 rubles, the savings for the entire volume will be 1,651,840.00 rubles. (4640.00 × 356).

Conclusion

The company will make a profit:

11,360,000.00 - 16,850,180.04 - 4,640.00 (10,655.94 + 4,645.80) = 23,509,746.36 rubles.

In addition to the considered methods for reducing costs, reducing overhead costs is considered no less effective: they are not directly related to the production of products and their reduction will not affect the production process and/or the quality of the products.

We have examined the most common methods of increasing profitability; now we will conduct a comparative analysis of the effectiveness of their use (Table 7).

Table 7

Comparative analysis of the effectiveness of various methods of increasing profitability

Method of increasing profitability	Revenue, rub.	Cost, rub.	Profit, rub.
Method of increasing profitability	Revenue, rub.	Cost, rub.	Profit, rub.
Initial data
Increase in sales
Increase in retail selling price
Reduction of the cost item “Payment”
Reducing the cost item “Material costs”

As we can see, the most profitable method turned out to be to reduce labor costs as they have the largest share in the cost of production. Its implementation allows you to increase profits by 30%.

To achieve the same profit result, it would be necessary to increase sales volume from 4640 units. up to 5400 units or increase retail price from 24 to 26 thousand rubles. Meanwhile, an increase in sales volume implies additional costs for expanding production, hiring additional workers, and the question remains whether such a number of chairs will be in demand on the market. In addition, an increase in price may lead to the loss of some buyers.

Thus, the most rational method is to reduce costs based on the results of an analysis of absolute profitability indicators.

Now let's see how the proposed methods will affect the indicators of profitability of product sales and profitability of sales (Table 8).

As a result of the implementation of any of the methods, indicators improve, reaching a maximum as a result of reducing costs under the cost item “Payment”. This means that the enterprise's production will become more efficient, and the enterprise itself will become more competitive.

The most effective method for reducing costs for an enterprise is under the “Payment” item, which was implemented by automating part of the production processes.

The problem should be solved comprehensively and the cost should be reduced across several cost items at once, not only to increase profits, but also to reduce the retail price.

conclusions

It is important to keep your finger on the pulse regarding the profitability of the enterprise and search for ways to increase it.

Let us remind you that the following factors influence the level of profitability:

unit sales price. It must be at the level of competitors and correspond to the payment capabilities of buyers. To increase profitability, they use the method of increasing the selling price, which, accordingly, increases sales revenue and profit;
the volume of product sales directly related to the level of demand in the sales market. The planned production volume must correspond to the demand for products: there is no point in producing much more than what the market requires (except in the situation of building up stocks of finished products). To increase profitability, they increase production volumes and look for new channels for selling products, thus increasing revenue;
cost of production. If the cost exceeds the revenue from sales of products, the enterprise will become unprofitable. To increase profitability, they try to reduce costs while keeping sales revenue constant.

The most effective method is to reduce the cost of production, since there is no guarantee that the product will be purchased at an inflated price or will be purchased in larger quantities.

When implementing a cost reduction method, there are several things to consider: important aspects, the main one of which is that the quality of products cannot be allowed to decline by reducing production costs.

In addition, it is worth remembering that when choosing this method In order to increase the level of profitability, it is recommended to reduce expenses in several areas (for example, according to the cost items “Labor” and “Material expenses”, expenses for which, according to statistics, have the largest share in the cost of production). This will allow you to achieve maximum effect from the implementation of the method under consideration: increase the level of profitability, reduce the selling price of a unit of production, and therefore ensure greater competitiveness and attract more potential buyers.

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Analysis of enterprise profitability indicators

Introduction

In conditions market economy a properly developed economic strategy, an optimally drawn up economic development plan, a management system and effectively organized accounting together ensure the financial stability of the subjects of economic relations.

Effective use of all types of production resources, reducing costs and increasing profitability are the main strategic objectives of any agricultural enterprise. Accounting, which completely, continuously, interconnectedly reflects any business transactions supported by documents, ensuring the reliability, timeliness and overall accuracy of information.

Currently in understanding accounting Some changes have occurred: the concept of accounting, all objects of which are reflected in the valuation, has been transformed into financial accounting, and operational accounting into management accounting.

Regardless of what the buyer and seller are guided by, both want to understand whether it is worth selling and whether it is worth buying, how much the business is really worth, what problems and profits it will bring in the future, which method of sale (purchase) is easier and more profitable.

In the specialized literature, the term “transparency” of a company is used, which means that it is possible to obtain real information about the business and its financial and economic activities relatively quickly and without problems, without in-depth long-term analysis.

Many domestic enterprises are opaque - accounting and tax reporting contains significant distortions, due either to the weak level of economic personnel, or to a reflection of various mechanisms for evading the tax burden.

Also, the assessment of the value of a business is carried out expertly based on the analysis of all significant data that may affect the cost of carrying out the necessary economic calculations.

What methods are used for these purposes? Based on the calculation of the cost of the enterprise and the planned level of profitability of the transaction. The basis for determining the selling price of an enterprise can be taken from the estimated value of the enterprise’s assets, cleared of liabilities, but not at accounting prices, but adjusted to market prices.

In a market economy great importance acquire profitability indicators, which are relative characteristics of the financial results and efficiency of the enterprise.

There are several groups of profitability indicators:

1) indicators characterizing the profitability of production costs and investment projects;

2) indicators characterizing the profitability of sales;

3) indicators characterizing the profitability of capital and its parts.

When analyzing profitability, it is necessary to determine individual indicators profitability in the reporting and previous periods, establish the trend of their change and determine the influence of individual factors on each of the profitability indicators.

1 . Enterprise income structure

profitability profitability capital asset

In conditions market relations To make management decisions, you need to know not only the amount of profit received by the enterprise, but also their profitability. Profitability characterizes the efficiency of the enterprise and the skill of investment management. The main parts of profitability are profit, but the profit that is given in the calculations is a rather conditional value. In practice, it is carried out: in accordance with a number of documents, in accordance with regulatory documents.

The concept of income is more capacious than profit. IN explanatory dictionary“income” is the flow of cash. Income- these are funds that come to the disposal of the enterprise in various forms. In modern economic conditions, along with profit, an enterprise can receive other income (dividends, interest on deposits, etc.).

Therefore, the final result from financial and economic activities would be correctly called not balance sheet profit, but income on the balance sheet.

The company has at its disposal temporarily free funds that are of a targeted nature, which are regularly received on the account. Such amounts of funds can only be used after a certain period of time. These are depreciation deductions, deductions to any reserve funds, for the creation of other funds provided for by law. When a reserve or other fund is created on the balance sheet, the profit itself decreases. These deductions are not included in the profit, but they remain at the disposal of the enterprise.

To determine the amount of funds of an enterprise, it is necessary to determine:

1) the amount of net profit

2) the amount of depreciation charges

3) the amount of accrued reserve funds from profits.

They characterize the profitability of the enterprise for the reporting period.

2. Absoluteenterprise profitability indicators

The economic feasibility of operating an enterprise in a market economy is determined by the receipt of income. The profitability of an enterprise is characterized by absolute and relative indicators. The absolute indicator of profitability is the amount of income or profit. In specialized foreign literature, the concept of “income” is defined as follows: “Income” is an increase in economic benefits during domestic period in the form of an influx of funds or an increase in the value of assets or a decrease in liabilities, which leads to an increase in capital, unless such growth is provided by contributions from shareholders.” Since in a market economy the main and final goal of an enterprise’s economic activity is to generate income and not loss, it is necessary to focus on this indicator.

The first absolute indicator of profitability is income from sales of products (works, services). It is shown in the report on the results of financial and economic activities minus value added tax, excise taxes, etc. taxes and mandatory payments, as well as the cost of returned goods, sales discounts and price rebates provided to the buyer. This article of the report on the results of financial and economic activities reflects income from the main activity, which can be received from the sale of inventories, provision of services, as well as in the form of remuneration, interest, dividends, fees and rent, depending on the main activity. When determining the degree of return on invested capital, a whole system of interrelated indicators is used. Each of these indicators has its own meaning for reporting users and has its own economic interpretation. When analyzing profitability, several calculation methods can be used, but most often they are calculated as a ratio of some type of income and some kind of comparison base.

Indicators(numerator):

1. Profit or income from the main activities of the enterprise, i.e. profit from the sale of products, services, type of work. This is the financial result of the enterprise for which the enterprise was created.

2. Profit or loss from financial activities. This is the balance between income and loss on operations not related to the sale of products, taking into account interest for using a bank loan.

3. Income from investment activities. That part of the profit from financial and economic activities, which is the amount of income from any financial investments in shares of other enterprises, shares, bonds.

4. Book income or book profit. This is the amount of income from financial and production activities enterprises.

5. Net profit. This is part of the balance sheet profit minus contributions to the reserve and other similar funds, minus the amount of profitable payments, minus income tax.

6. Profit is at the complete disposal of the enterprise. This is an absolute indicator, equal to income after completion of all distribution operations, differs from net profit by the amount of accrued dividends on shares.

7. Net result of the operation of investments = the amount of book profit + interest on the loan.

This is the economic effect obtained by the enterprise from the use of invested capital. This indicator can be considered as payment for financial assets placed at the disposal of enterprises or as income from equity or borrowed capital.

8. Cash flow. The amount of funds that a company has at its disposal, albeit temporarily

Cash flow = net profit + accrued depreciation + reserve fund.

Denominator of absolute indicators:

1. Revenue from sales of products excluding VAT and excise taxes.

2. Own capital = authorized capital + amount of reserve capital + amount of reserve funds + amount of retained earnings from previous years + amount of funds social sphere+ amount of targeted funding + amount of budget revenues + amount of intersectoral extra-budgetary funds.

3. Net assets= sum of own sources of funds + sum of long-term liabilities.

This is the amount of funds invested in the enterprise.

Profitability indicators can be calculated either for a specific date or based on average annual data.

3. These indicators are divided into:

a) indicators of profitability of the enterprise’s activities

b) return on equity indicators

c) indicators of profitability of the enterprise's assets.

3. Analysis of relative profitability indicators

Relative indicators of profitability, as mentioned above, include indicators of profitability (profitability), characterizing the efficiency of the enterprise, which in a market economy determines its ability to express financially, attract sources of financing and their profitable (profitable) use. They measure the profitability of an enterprise from various positions and are grouped in accordance with the interests of participants in the economic process and market exchange. Since the profitability ratios are important characteristics factor environment for the formation of income (profit) of the enterprise, they are mandatory elements comparative analysis and assessment of the financial position of the enterprise.

Profitability indicators:

1. Self-financing rate = Balance sheet profit (6) / Amount of products sold * 100.

This indicator reflects the profit that the enterprise has from each ruble of products sold. It characterizes the ability of an enterprise to self-finance, it has important when developing financing policies and can be considered as an opportunity for intensive development.

2. Rate of business income = Net profit (5) / Sales revenue * 100.

Gives an idea of the results of the enterprise’s economic activities and the degree of strength of its position. This indicator characterizes the strength of the enterprise in the sales market. Decrease-reduction in supply of products.

3. Profitability of products sold = Profit from sales (1) / Revenue from sales * 100.

Managers use this indicator to monitor the relationship between the quantity of products sold, their prices, and the value of production costs.

Return on equity indicators:

4. Return on equity = Net profit (5) / Owner's equity.

This is a key investment indicator; in the West it is called the rate of return on equity. Shareholders and investors pay attention to this indicator Special attention, since he the best way shows how much profit each ruble of own funds brings.

5. Total profitability = Balance sheet profit / Equity*100.

This indicator characterizes the activities of the enterprise, the profitability of the enterprise from all types of activities per 1 ruble of equity capital. This indicator is used when analyzing working capital. This capital can be characterized by its share in the total amount of assets. This is the ratio of debt capital and equity capital.

Return on assets indicators:

6. Net profitability= Net profit / net assets*100. Provides an estimate of return on equity.

7. Profitability total capital= Net result (7) / net assets*100.

In foreign practice, this indicator is considered as one of the main ones and characterizes the performance of the enterprise.

Liquidity analysis

In market conditions, the activity of an enterprise and its development is carried out mainly through self-financing, that is, its own capital. Only when there is insufficient own financial resources borrowed funds are attracted. In these conditions special meaning acquires financial independence from external borrowed sources, although it is difficult, almost impossible, to do without them.

It is important to establish not only the actual amount of equity capital, but also to determine its share in the total amount of capital. This indicator in the specialized literature goes by different names (ownership coefficient, independence coefficient, autonomy coefficient), but its essence is that it determines how independent an enterprise is from borrowed funds and is able to maneuver its own funds.

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