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There are many ways to measure the effectiveness of an organization. The main one is to calculate the profitability ratio. It is this indicator that should be primarily taken into account by the owner of the enterprise, taking into account that the profitability of a business is determined by the size of the result obtained in relation to the resources expended.

Based on the analysis of the data obtained during the calculation, we can draw a conclusion about how the business is developing, what are the strengths and weaknesses of the this moment there are parties in the activities of the enterprise, as well as what actions need to be taken to improve the efficiency of its work.

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One of important indicators The results of product sales is return on sales, which reflects the net sales income of the company.

Definition and economic meaning

Before moving on to methods for calculating profitability, it is necessary to understand its economic meaning. Profitability shows how effectively a business uses its resources.

In general, profitability is calculated in order to:

• control profits;
• monitor business dynamics;
• compare the results obtained with similar indicators from competitors;
• identify which products are profitable and which are unprofitable.

In relation to sales, the activity of an enterprise should be determined not only from the point of view of maximizing revenue, but also from the position of the volume of net profit from trading turnover. For this purpose, the return on sales ratio is calculated, which shows the efficiency of sales of goods and allows you to determine the percentage of its cost in total revenue.

Return on sales, assets and equity

When analyzing an organization's activities, various profitability ratios are usually considered not individually, but in aggregate.

At the same time, the main indicators of the company’s performance are the following profitability ratios:

• assets;
• capital;
• sales

The indicator demonstrates how much profit is received from the sources involved in production - monetary resources, capital and other resources. To determine the return on assets, you need to divide the net profit by the amount of assets in average annual terms (the sum of the values ​​for the first and last number year divided by 2) and multiplied by 100%.

Return on assets values ​​are compared on an annual basis to determine how much the actual value differs from the predicted value and what exactly contributed to the deviation.

Return on capital is calculated as the result of dividing net (after paying contributions to the budget) profit by the total cost of fixed assets in average annual terms, multiplied by 100%. This coefficient reflects income received from the use of capital assets in the production of goods.

Return on sales makes it clear what share of the company's revenue is profit, and is calculated in several ways (depending on the different subtypes of profit), which will be listed below. Based on data on the profitability of sales, the company makes decisions on pricing and the amount of associated household expenses. activity costs.

Profit Margin Analysis

By calculating the profitability of sales for several periods, it is possible to determine the dynamics of change per individual unit of production. Profit margin may vary depending on various factors, which will be considered in factor analysis.

Its increase occurs in the following cases:

• with an increase in revenue accompanied by a decrease in costs;
• with a simultaneous decrease in revenue and expenses, when the latter are reduced faster;
• with revenues increasing and costs increasing at a slower rate.

A decrease in the indicator occurs under the following circumstances:

• profits and expenses grow simultaneously, but expenses increase faster;
• revenue and expenses are declining, but the rate of decline in revenue is greater;
• expenses increase and revenue decreases.

Other factors also influence the profit margin: inflation, changes in demand for products, and competing firms.

Calculation formulas

Return on sales is determined by three different methods:

• by using the amount of net profit in the calculation;
• through preliminary calculation of gross profit;
• based on operating profit.

By net profit

Formula for determining profitability in in this case next:

R = [net profit]/[revenue]*100%

The value is usually calculated over several periods - only then can it be obtained Objective assessment the company's activities and its payback.

Based sudden changes coefficient or, conversely, its stability, you can get a general idea of ​​the company:

• how competently decisions are made;
• Are the attracted resources used effectively?
• What successes and problems does the organization have?

By gross profit

In order to determine gross profit, you need to subtract the cost of production from revenue.

The formula for calculating the gross profit ratio is as follows:

R = [gross profit]/[revenue]*100%

By operating profit

To calculate the return on sales for a company's main line of business, it is first necessary to determine operating profit by deducting direct and operating expenses from net profit.

Operating profit margin formula:

R = [operating profit]/[revenue]*100%.

By balance

All necessary values ​​for calculating profitability of sales using the above formulas are taken from balance sheet and Form 2, reflecting the company’s financial results.

In this case, the formula for calculating the balance sheet ratio will depend on what type of profit is used to determine profitability:

Example of coefficient calculation

Initial data:

• sales revenue for 2019 amounted to 21 million rubles;
• net profit for 2019 – 6.2 million rubles;
• sales revenue for 2019 – 24.4 million rubles;
• net profit for 2019 – 6.46 million rubles;

To determine changes in sales profitability in 2019, you must first calculate the profitability value in 2019.

If you plug the values ​​into the above formula, you get the following result:

R2015 = 6.2: 21 = 0.295, or 29.5%

R2016 = 6.46: 24.4 = 0.265 or 26.5%

By subtracting one coefficient from the other, you can get the percentage change in profitability:

R = R2016 - R2015 = 26.5 - 29.5 = -3%

Thus, this example shows that in 2019 the decrease in profitability was significant - the figure decreased by 3%.

Standard value at the enterprise

There is no specific standard for the return on sales ratio. Any value above zero is a good indicator. If Krp<0, то руководству стоит всерьез задуматься об эффективности управления компанией.

If we proceed from the statistical data available for various sectors of the national economy, then we can focus on the following average values ​​for Russia:

If the coefficient is low or negative, the management team of the organization must change the methods of managing the enterprise, increasing its efficiency by expanding the customer database, increasing the rate of asset turnover and reducing the purchase cost of raw materials, goods or services from contractors.

Dynamics of change and its impact

Thanks to the analysis of profitability of sales, you can get an accurate and objective assessment of the current state of affairs of the company. Considering that this coefficient reflects the most important result of the enterprise’s activities - the sale of products, the development trend of the organization can be determined depending on the increase or decrease in the coefficient.

Increase in indicator

An increase in the return on sales ratio is generally a good indicator, but depending on its reasons, it can have a different shade.

A favorable trend is when revenue growth is faster than cost growth. This means that the company manages to contain the increase in variable costs, which in this case increase nonlinearly.

If the coefficient increases due to the fact that both costs and revenue decrease at the same time, and the latter decreases more slowly, then this trend can no longer be unambiguously called favorable, although the coefficient has formally increased. This situation requires a more in-depth analysis so that you can determine why revenue decreased.

Finally, the most optimal scenario is an increase in revenue while reducing costs. In this case, the company must analyze why this is happening and in the future try to adhere to this course of events.

Decrease in indicator

A decrease in sales profitability is negative in any case, regardless of the nature of changes in revenue and costs.

To correct the current trend, the company must take appropriate actions (depending on the reasons that led to the decrease in the indicator):

• review pricing and marketing policies;
• change the range of goods;
• reduce costs.

Factor analysis

In order to understand why there was an increase or decrease in the return on sales ratio, factor analysis is used, with the help of which you can find out the strengths and weaknesses of the company’s activities and predict the company’s future development strategy.

The increase in revenue while reducing costs is due to the following reasons:

• sales growth;
• change in the range of goods;
• reduced cost control.

A decrease in revenue at a lower rate of cost reduction may occur due to rising prices for goods and changes in assortment.

The simultaneous growth of revenue and expenses at a lower rate of the latter is influenced by the following factors:

• cost reduction;
• price increase;

The reasons for revenue growth and expenses that increase faster are usually the following:

• increasing the cost of goods;
• high price level;
• structural change in the assortment.

A decrease in revenue with a simultaneous, slower decrease in costs is observed when there is a loss of influence in the market or the curtailment of production.

One of the main indicators of an organization's performance is return on sales based on net profit. What does this indicator characterize? How is it calculated? All the details are below.

What is return on sales based on net profit?

The concept of profitability is directly related to the success, that is, profitability of any business. This financial indicator can be calculated for the enterprise as a whole or separately for its divisions (types of activity). In the process of calculations, it is easy to determine the return on assets, fixed assets (fixed assets), sales, goods, capital, etc. First of all, the calculation is based on the analysis of income accounting data for a certain time period.

Analysis of profitability values ​​allows you to find out how effective is the management of the funds invested in the creation and further development of the company. Since calculations are carried out as a percentage or as a coefficient, the higher the results obtained, the more profitable the business is considered. Profitability calculation is used in the following situations:

• For short- and long-term profit forecasting.
• When receiving credits and loans.
• When developing new directions and analyzing existing types of commercial activities.
• During industry benchmarking.
• In order to justify upcoming investments and investments.
• To establish the real market price of a business, etc.

The return on sales indicator indicates what part of the company's revenue is profit. In other words, how much income did each ruble of sold products (works or services) generate? By managing this ratio, the head of the company can adjust the pricing policy, as well as current and future costs.

Return on sales based on net profit - formula

When calculating the indicator, the organization's accounting data for a given period of time is used. In particular, to determine the profitability of sales, information on net profit is required, which is indicated on page 2400 f. 2 “Report on financial results” (the current form was approved by the Ministry of Finance in Order No. 66n dated 07/02/10).

The formula looks like this:

RP = PE of the company / B, where:

RP is the value of return on sales,

PE - the amount of net profit (line 2400 f. 2),

B – the amount of revenue (line 2110 f. 2).

Additionally, to refine the indicators, you can calculate gross profit margin or operating profitability. Formulas change in accordance with specified goals:

RP for VP = VP of the company / B, where:

RP for VP - gross profit margin,

VP of the company - gross profit of the company (line 2100 f. 2),

B is the amount of revenue.

Operating RP = Profit before taxation (line 2300 f. 2) / V.

What return on sales value is considered normal?

We have already found out that RP shows the level of profit for a certain period. In dynamics, this coefficient helps to establish how the profitability of a business changes over time. To do this, analyze data for several periods - basic and reporting. Then it is easy to calculate the profit margin by performing factor calculations.

What profitability value is considered normal? There is no clear answer to this question. Optimal indicators depend on the type and specifics of the activity of the enterprise or its division. Of course, the higher the value obtained, the better, but the results can also be influenced by such factors as the duration of the production cycle, the presence of investments, etc.

The average indicator of good profitability is considered to be a coefficient in the range of 20-30%, average - 5-20%, low - 1-5%.

The main criterion for business success is the final financial indicators, which consist in the profitability of the activity. There are several options for calculating the effectiveness of business relations, one of which is calculating the return on sales based on net profit. The formula for this method is given below.

Net profit

All Russian enterprises taking part in economic life are created to generate income.

The main criterion for assessing the efficiency of activity is the net profit of the enterprise.

This value is subject to mandatory reflection in the accounting records. the company's balance sheet (clause 23 of PBU 4/99).

In addition, the Ministry of Finance of the Russian Federation, by Order No. 66n dated 07/02/2010, approved the official forms of the balance sheet and financial statements.

According to the above-mentioned act, the enterprise’s net profit indicators are reflected in line 2400 of the financial results statement.

You can obtain the desired value of the organization’s efficiency by subtracting the information in section 2410 from the indicators on line 2300.

In addition to this method, the company’s net profit can be obtained by excluding from gross revenue:

• full cost;
• taxes, contributions and obligatory payments.

Also included in this calculation are income and expenses from the non-core activities of the entity.

The net profit of the enterprise remains the property of the company and can be spent at the discretion of the beneficiaries of the company for the following purposes:

• payment of income to business owners;
• directing profits to increase the company's working capital;
• organization development;
• other needs at the discretion of the owners of the subject of economic relations.

It is also necessary to take into account that the return on sales can be calculated using net profit.

Return on sales based on net profit

It should be noted that calculating the profitability of the enterprise as a whole, as well as the efficiency of sales, is not a prerequisite for the correct maintenance and preparation of financial statements.

However, this value is necessary for:

• correct assessment of the profitability of the enterprise;
• determining the share of profits from various sales;
• determining the dynamics of sales revenues;
• timely correction of business tactics and strategy.

Currently, the formula for return on sales based on net profit is as follows:

RP = PE / VR, where:

• RP - return on sales;
• PE - net profit;
• VR - revenue.

As mentioned above, the value of net profit is contained in line 2400 of the financial results statement, which is mandatory to be filled out by the enterprise.

The revenue indicator is reflected in the same document, but in line 2110.

It should be especially noted that the official form for calculating return on sales based on net profit, as well as other indicators, has not been developed at the legislative level. Accordingly, business efficiency can be calculated using other values, for example:

• gross profit;
• profitability before tax.

All of the above indicators are also contained in the income statement.

In conclusion, it should be noted that the provisions of domestic legislation do not contain any standard indicators of profitability. Accordingly, each subject of economic legal relations should determine the acceptability of the level of efficiency of its business, taking into account the specific features of its implementation.

Explanation of the indicator

Profitability of products sold based on net profit (English equivalent - Net Profit Margin) is a profitability indicator that indicates the amount of net profit (company revenue minus operating expenses, interest, taxes, etc.) that is generated by each ruble of sales. The indicator is calculated as the ratio of net profit to sales volume. The value indicates the share of the company's revenue that remains after deducting absolutely all expenses for the current period. The value also allows you to approximately predict how much the company’s net profit will increase if the sales level increases by one ruble.

Standard value:

There is no such standard value for the indicator. Like many other indicators, it is necessary to compare the value with competitors who operate in the same segment.

Rosselkhozbank offers the following standard values:

Table 1. Standard value of the indicator, %

Source: Vasina N.V. Modeling the financial condition of agricultural organizations when assessing their creditworthiness: Monograph. Omsk: Publishing House NOU VPO OmGA, 2012. p. 49.

A negative value indicates the degradation of the company. A high value indicates a strong market position, the value of the company's service or product, and good management.

Directions for solving the problem of finding an indicator outside the standard limits

Considering that net profit is formed under the influence of all factors that form income and expenses, the search for opportunities to increase profitability is possible in the operating, financial, and investment areas. Optimizing the structure of financial resources and reducing the cost of attracting them, using tax benefits, reducing costs for the production of goods and services, optimizing costs for marketing communications, all this will increase the profitability of sales. Of course, this list of possible directions is not exhaustive.

Calculation formula:

Return on sales by net profit = Net profit (loss) / Revenue *100%

Calculation example:

Company OJSC "Web-Innovation-plus"

Unit of measurement: thousand rubles.

Return on products sold based on net profit (2016) = 643/3154*100% = 20.39%

Profitability of products sold based on net profit (2015) = 667/3241*100% = 20.58%

Return on sales in terms of net profit remains at a stable level and in 2016, each ruble of sales brought 20.39 kopecks of net profit. This is a high figure, which indicates the effective cost management of the Web-Innovation-Plus company. The decrease in revenue led to an almost proportional decrease in expenses.