Retained earnings as the end result of an activity is an important marketing issue. The result or result of the activities of each enterprise is profit. The entire economic system is based on efficiency and profitability. Profit is an incentive for the subsequent development of the enterprise. The effectiveness of production proves its ability to self-sufficiency and the availability of funds for self-financing. One of the most important indicators of profitability and financial solvency of the enterprise is the balance sheet profit.
Carrying profit is determined by adding up all types of profit for a certain period. More precisely, the structure of retained earnings consists of several indicators. This is the amount of profit earned from the sale of products, the final result from operations not related to the sale, and profit from the sale of other goods and services. The total amount of retained earnings and shows the efficiency of the enterprise.
This indicator is calculated on the basis of accounting. Its components are calculated as follows. Profit from sales - this is the total amount of income received from sales minus the costs of its production, VAT and excise taxes. The final result from non-operating transactions includes income from operations with securities and from leasing property, as well as the payment of fines and penalties. Profit from the sale of other goods and services is the income received from auxiliary production.
The further development of the enterprise depends on the profit received. In addition, at the expense of profit, you can replenish working capital. It also forms the basis of funds for various purposes. Carrying profit is the main indicator in credit operations. It is for this factor that banks and credit organizations determine the financial viability of an enterprise.
The profit resulting from the activity allows improving production, purchasing new equipment and applying the latest technologies. All these investments are necessary in the modern economy. Continuous development is the key to economic stability and prosperity. Therefore, in order to track the financial situation and get the final result of the enterprise, economic indicators are calculated . Based on these data, an analysis of the activities is carried out and conclusions are drawn.
Naturally, the optimal result of the work will be a positive indicator of retained earnings. But to obtain it, it is necessary that its components be profitable. Profit from sales depends mainly on the cost of production. Its decline is the main factor that affects profits. Cost includes all costs of production. They can be reduced due to a more rational consumption of materials and the efficient use of labor personnel. Therefore, the correct investment in production after a certain period begins to make a profit.
In case of loss-making of the enterprise, it is necessary to analyze the current situation and economic indicators and find out the reason for the negative result. It is necessary to take all measures to increase the profitability of production. Retained earnings must be stable. This can only be achieved with the coordinated work of all departments of the enterprise.
In today's world, the economy is based on a stable profit. Only then can you be sure of the prosperity of the enterprise and its long-term existence. High profitability is an opportunity for partnership and trust of credit institutions. The desire for profit should not be based on crime and excessive overpricing.