To assess the comparative effectivenessindividual industries and enterprises that produce different types of products in different volumes, use profitability indicators. These indicators show the ratio of the profit received to the resources spent on production. Of all the indicators, the most commonly used are indicators of profitability of production and profitability of production.
The profitability or profitability of an enterprise is usuallyis estimated both with the help of absolute and relative indicators. At the same time absolute indicators usually reflect profit, which is measured in value terms. If we consider the relative indicators that characterize profitability, then they are measured in percent or reflected in the form of coefficients. Profitability indicators are less dependent on inflation than the amount of profit, since they are relative values associated with the profit and expenses of the enterprise.
The most important of these indicators is return on assets, which is also called profitability of property. To determine it, you need to divide the remaining profit at the enterprise's disposal by the average value of the enterprise's assets. This indicator characterizes the profit that the enterprise receives from each ruble, attributed to the costs of forming its assets. It expresses the measure of profitability of the whole enterprise in a particular period. It takes into account not only the amount of profit, but also the change in the value of fixed assets, current and non-current assets. In general, this important indicator includes indicators of profitability of fixed assets and current assets.
Considering other types and indicators of profitability it is necessary to note such an important indicator as return on investment. With his help, the effectiveness of using the funds that are directed to the development of this enterprise is determined.
The next important indicator for economic analysis is product profitability. To determine it, the remainingenterprises profit divided by the total amount of cost of sales. Also, for calculation, not all the total profit can be used, but only the profit received from the sale of the products. The value of this indicator reflects the amount of profit that the enterprise has from each ruble invested in production and spent for the sale of products. It can be calculated both for the entire enterprise, and for individual units of the enterprise and for certain types of products. In some cases, the ratio of the remaining profit at the disposal of the enterprise to the total amount of revenue received from the sale of products is used to calculate this indicator.
The last important factor characterizing profitability indicators is the sales profitability. To calculate this indicator, you needThe profit received from the sale of products is divided by the total proceeds from the sale of products. With its help, it is determined what proportion of the profit is included in the total proceeds from the sale of the enterprise's products. This indicator is also called the norm of profitability. When you look at it, you can see that when the profitability of sales starts to decline, such a factor indicates insufficient competitiveness of the products on the market, therefore, the demand for products is reduced. To increase the level of profitability of sales, you need to focus on changing market conditions, track changes in product prices, constantly monitor the level of production costs, the costs of selling products and implement a flexible policy in the field of product range and sales.
