Profit - this is one of the most important outcome indicators of all types of activities of the enterprise in the financial and economic sphere, which is defined as the difference in income and expenses. This is a pretty general definition.
For the most complete assessment of the results of work, several types of profit are calculated:
balance sheet;
gross (banking);
net economic;
marginal;
nominal;
real;
unallocated;
capitalized;
normal.
Our task is to understand what is the balance sheet profit of the enterprise and how it is calculated.
For clarity, we will present this indicator in the form of the formula: BP = PR + PRi + PVo, where
- BP - retained earnings;
- PR - profit or loss received from the sale of all manufactured products of the enterprise, rendered services;
- When - profit or loss resulting from the sale of the company's own property;
- PVO - profit or loss resulting from non-operating transactions (fines, penalties, interest, losses due to natural disasters, etc.).
Therefore, retained earnings is an indicator that is calculated as the sum of all profits and losses of an organization or enterprise, both as a result of the sale of its goods and services, and from actions not related to the sale.
It is a source of replenishment of regional budgets at all levels, because from such profits taxes and other obligatory payments are paid.
Carrying profit is the basis for the successful economic development of the enterprise, because after listing all mandatory payments and taxes, it is used to form:
accumulation fund (it is precisely at the expense of these funds that the scientific, social, and technical development of the enterprise takes place);
consumption fund (a source for the provision of material assistance, payments to labor veterans, payment of vouchers, maintenance of clinics, payment of transport fare, etc.);
dividend fund, which is formed on the basis of the decision of the meeting of shareholders.
We see how important the profit margin is. Therefore, the value of its correct calculus is difficult to overestimate. To this end, in practice, the following indicators of profit of the enterprise are used:
Gross, which is calculated in order to determine the amount of taxation.
Profit from sales (the difference between the amount of funds received from the sale of products and spent on its production and sale).
Profit received as a result of financial activities and non-operating operations of the enterprise.
Carrying profit is as a basis for calculating all other indicators.
Taxable.
Net is the balance of retained earnings after all taxes and fees have been transferred. The enterprise management can already dispose of it independently.
It is difficult, of course, to talk very briefly about such an important indicator of the results of the enterprise. But we will try to summarize some of the results.
Profit - this is not the entire income of the enterprise as a whole, but its “purified” part, from which all expenses are excluded. In other words, this is the residual indicator, which is expressed by the difference in total income and total expenses of the enterprise.
Carrying profit is not a guaranteed result at all, but the result of professional, skillful management of an enterprise or any other business. Due to unqualified, ill-considered actions, as well as various objective reasons, you can lose significant funds and not receive the expected profit in whole or in part.
In market conditions, this indicator is of great importance. To increase it, any producer is forced to increase output, while reducing the cost of its production.
Net profit for the purpose of economic growth of the enterprise and increase its competitiveness is increasingly used for investment and innovation.