Every year, enterprises prepare financial statements. According to the data from the balance sheet and the profit and loss statement, you can determine the effectiveness of the organization, as well as calculate the main planned indicators. Provided that the management and financial department understand the meaning of such terms as profit, revenue and sales in the balance sheet.
Terminology
The sales volume of products in the balance sheet is the volume of revenue received for the sale of goods in the reporting period. Moreover, the form of calculations does not matter. Products can be sold on credit, for cash, with deferred payment or at a discount. Therefore, for a more accurate calculation, the formula for calculating net sales in the balance sheet is used when the revenue received is adjusted for the amount of goods shipped on credit.
Sales reflect the amount received by the company. Therefore, it should be calculated by all organizations. The indicator can be expressed in the amount of goods sold, the amount of funds received, the monetary value of goods sold, etc.
Revenue
First of all, you need to determine the revenue:
Revenue = Volume of production: output x Price.
The enterprise, which is a monopolist in the market, the price of the goods does not change. That is, the sales volume depends only on the quantity of manufactured products. To determine how efficiently the enterprise operates, it is necessary to subtract the total costs from the amount of revenue received. Costs increase with increasing output. This nuance should be considered when planning production.
Scope of work
Work is an action aimed at development. The volume of production is measured in the number of manufactured products of each type. And how to calculate this indicator, for example, in construction? You must first familiarize yourself with the design materials, divide them into underground and ground works. Then, the amount of necessary work for each task is calculated: laying the foundation, heating system, water canal, all floors and building elements. The consumption rate of materials is indicated in the design documentation. The calculated volume of work is multiplied by its cost.
Costs
The amount of expenses for the production of products in the BU is called the cost. It includes labor costs, material, logistics costs, interest on loans. All expenses are divided into fixed and variable. The former do not depend on production efficiency. This is the sum of fixed costs, such as rent, taxes, depreciation, etc. Variable costs vary in proportion to the change in the quantity of manufactured products. Most of the funds are used to purchase materials and pay salaries.
Profit calculation
Profit is one of the performance indicators. Therefore, when analyzing the work of the organization, one should correlate the level of profit received with the expenses incurred. There are several types of profits.
1. The income received from sales is called revenue or sales.
2. Gross profit is the volume of sales adjusted for the amount of production costs incurred:
3. Net profit is gross profit cleared of all other expenses:
Example No. 1
In April, the company sold goods worth 200 thousand rubles. The cost of production amounted to 90 thousand rubles. Overhead costs in the form of salaries, rents, taxes amounted to another 30 thousand rubles. We consider:
- VP = OP - S / C = 200 - 90 = 110 thousand rubles.
- PE = VP - Costs = 110 - 30 = 90 thousand rubles.
Let us further consider how you can determine the net sales in the balance sheet.
Formula
Sales can be calculated as follows:
- OP = (Fixed costs + Profit): (Price per unit - Variable costs per unit).
To determine the target sales volume, use the following formula:
- OP = (Fixed costs + Profit before interest): Marginal profit.
- MP = Price - Variable costs per unit.
As mentioned earlier, in order to determine the efficiency of an enterprise, it is more advisable to calculate the net sales in the balance sheet. How to count? The OP must be adjusted for the amount of returned goods, as well as those that were sold at a discount, provided by the consumer. The formula is as follows:
- HRE = (Net Profit x 100%): (OP - Return Products).
Example No. 2
According to the results of the month of operation, the company received 1.32 million rubles. arrived. Products are sold at a price of 250 rubles. a piece. Variable costs per unit are 98 rubles, and constant costs for the entire production volume are 0.38 million rubles. We determine the volume of sales in the balance sheet.
1. First you need to find a marginal profit:
MP = Price - Variable expenses = 250 - 98 = 152 rubles.
2. Calculate sales:
OP = (Fixed costs + Profit before interest): Marginal profit = (380,000 + 1,320,000): 152 = 11,250 pcs.
How to determine the volume of sales in the balance sheet
Having the data of financial statements, you can calculate all the main financial indicators. You can, for example, determine the volume of sales. The balance formula as such does not exist. Since these data are reflected in the “Profit and loss statement”. Line 2110 indicates the amount of products sold in monetary terms after deduction of VAT. It also reflects all expenses for the manufacture and delivery of products: p. 2120 + p. 2210 + p. 2220. The organization may experience other unforeseen expenses (p. 2350) and income (p. 2340).
So you can calculate the net profit or net sales in the balance sheet:
Line 2400 = 2110 - (2120 + 2210 + 2220) + 2340 - 2350 - 2410, where 2410 is the amount of income tax.
Net sales in the balance sheet can be calculated by subtracting retained earnings (uncovered loss) at the end of the period from the value at the beginning of the period. A positive difference indicates a net profit, and a negative one indicates a loss.
Profitability
The effectiveness of the company in the reporting period is calculated by the ratio of various indicators of profitability and costs. There are several indicators of profitability. Consider the main ones.
Sales efficiency is determined by the ratio of profit to revenue. If gross profit is used in the fraction numerator, then this indicator is called gross profitability of sales. =:
- GPM = Gross profit: Revenue = (Sales - Full s / s): (Price x Number of products).
Operating sales profitability is calculated as follows:
- ROS = EBIT: Revenue = p. 2300 + 2330: (2110 - (2120 + 2210 + 2220)).
Return on sales by balance:
- RP = Profit: Revenue = p. 050: p. 010 (f. No. 2).
- RP (from f. No. 2) = 2200: 2110.
Most often, to determine the effectiveness of sales, an indicator of net profitability is calculated:
- NPM = Net Profit: Revenue.
These formulas determine the share of different types of profit in revenue. After analyzing the value of the coefficient in the dynamics, you can determine what changes have occurred in the organization.
Reporting Explanations
Each type of accounting report is accompanied by an explanatory note. It contains information:
- About the selected method of accounting for fixed assets, goods and materials;
- a description of certain balance sheet items (terms of debt repayment, rental payments, etc.);
- information on shareholders, capital structure;
- data on mergers, acquisitions, liquidations;
- off-balance sheet items.
Often an explanatory note provides more information about the financial situation than reports. According to the data from the balance sheet and f. No. 2 you can get information about the current state of affairs and performance. The presence of false information is worse than its absence. Therefore, it is important that the financial statements are prepared correctly.
Unfortunately, even accountants are wrong. The use of technical means avoids arithmetic errors, but not methodological ones. Also, reporting may be distorted due to the low skills of the specialist.
It is important to understand that the data in the balance sheet reflects the state of affairs at the reporting date. The very next day, these indicators are changing. In the last weeks of the reporting period, the organization tries to defer payments, but in the first days of the new year, funds will be used to pay off debt. Therefore, reporting is always done "with a margin." In registries, you can always find costs that will reduce the profitability indicator. For example, write off more stocks, fixed assets or bad debts. After all, losing profits is always easier than building up.
According to the accounting rules, all transactions should be carried at historical cost. But assets and liabilities arrive on the balance sheet at different periods of time. Therefore, the carrying costs of the acquisition do not reflect the real value of the assets. Currency fluctuations should also be considered if there are assets or liabilities denominated in a foreign currency.
Conclusion
The financial statements are used to calculate sales. However, one should not rely entirely on balance sheet and form No. 2. They contain only part of the important information. Typically, profitability and real value of assets in reporting are underestimated.