Gross profit is one of the key indicators of the financial activity of an enterprise. Below you will find the meaning of the term, the formula for the breakdown of gross profits and a description of the value of the indicator.
What is the gross profit?
Gross profit is the revenue of the enterprise minus the cost of goods. Since a pottery factory has sold 10 pottery pots for a total of 10,000 rubles over the past year, before the gross profit is released, it is necessary to know the consistency of their production.
This includes spending on clay, water, electricity, and paying for the work of the master. Also, before expiration, turn on the depreciation of the pottery stake, the value of the premises. If the potters were sold through a local store, the company would need to include expenses for transporting the products, the commissary wine city, and the trading line.
If the amount of expenses was 6,500 rubles, and the revenue was 10,000 rubles, then the gross profit of the mine is 3,500 rubles.
Formula for gross profit growth
Gross profits are calculated according to the following formula:
Vir - C = PRval
The meanings are deciphered as follows: Vir – revenue, S – sobivartіst, PRval – gross profit.
This is the classic formula with which industrial enterprises profit. Merchants will insure their gross profit using the “gross income” exchange rate:
Indikh - C = PRval
Merchants operate with a variable “gross income”, the fragments of which redistribute a significant part of the proceeds to the profit of the producers. For example, let’s sell a ton of apples for 10 thousand. rubles, the merchant can buy this product from the manufacturer for 8 thousand. rubles After the sale, the merchant's profit in the warehouse is 10,000 rubles, and the gross income is 2,000 rubles.
What is the significance of the “gross profit” indicator?
Gross profit is one of the key metrics of the efficiency of manufacturing enterprises. It shows how effective the government's processes are and the virobnicity of the organization of slaughter.
A simple example of a pottery maker shows that its activity is effective. The cost of the manufactured products was 6,500 rubles. And the profit from the sale of miners is 10,000 rubles. In this case, all expenses for production activities, including depreciation of equipment, were included.
Regardless of the positive value of gross profit, the activity of a hypothetical pottery enterprise may be inflated. It will happen that the sum of taxes and fines exceeds 3,500 rubles or the sum of gross profits. In some cases, the net profit will be negative.
In order to increase gross profits, businesses can reduce the quality of their products or increase their productivity with their co-workers. The other way changes the competitiveness of the organization, so it is impossible to compete after exhausting all possibilities of changing costs for production. Specific periods should be kept in mind due to the economic situation and the low level of other officials. The most obvious ways to reduce product quality include:
Change of wage rate for labor. In this situation, you will have to strive to hire existing facists rather than hire new ones.
Decreased milkiness.
Scaling of virobnitstva.
Energy saving.
Reduced taxes for logistics.
Changes in product costs.
Improving the effectiveness of marketing.
It is practical for trading enterprises not to use gross profit indicators to assess the effectiveness of operations. The enterprises of which focus on profitability and sales, net profit and other indicators.
Also, gross profit is an indicator of the financial activity of an enterprise. It will be insured as the difference between revenue and product quality. Gross profits can be easily compared with the method of assessing the efficiency of the work of manufacturing enterprises.
Cost of sales or Cost of goods sold - COGS ). The mother's trace is on the road, so Gross profit It is divided into operating profit (Profit before payment of taxes, penalties and fines, interest on loans).Net profit from sales is calculated as follows:
- Net income from sales = Total income from sales − Volume of goods turned over and reductions made.
Gross profit is calculated:
- Gross profit = Net profit from sales - Consistency of sold products and services.
Gross profit should not be confused with Net profit:
- Net profit = Gross profit - Amount of operating expenses - Amount of taxes, penalties and fines, payments for loans
Compliance with sold products is insured differently for production and trade.
In general, this indicator generates income for the benefit, without indirect expenses.
For divisional trading, gross profit is the proceeds from the profitability of goods sold. For the manufacturer, direct costs include costs for materials and other costs for the creation of the product. For example, spending on electricity for a robotic machine is most often considered as a direct expense, and spending on lighting the machine room is considered as an overhead expense. Wages can also be direct, in that workers are paid a price per unit of manufactured goods. For these reasons, service fees, such as selling your services at a monthly rate, are often placed before wages and before direct expenses.
Gross profit is an important indicator of profitability, but when expanding net income, it is necessary to account for indirect expenses.
Div. also
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Wonder what “Gross profit” is in other dictionaries:
- (contribution, gross margin, gross profit) 1. The amount of pennies that is consistent with the principles of calculating the contribution of direct deductions (marginal costing) to bring in this transaction and that covers the permanent invoices of deductions and gives ... Glossary of business terms
- (gross profit) The company's income before the recovery of depreciation and payment of taxes from it, and after the recovery of hundreds of assets from debts. economics. Tlumachny dictionary. M: INFRA M, Vidavnitstvo Ves Svit. J. Black. Editorial office: Doctor of Economics Osadcha... ... Economic dictionary
- (gross profit) Aggregate income of the organization from sales with reimbursement of expenses for the sale of goods. These expenses include expenses for their equipment and preparation to bring them to market conditions, but also include expenses for their life and care. Financial dictionary
Part of the gross income of the enterprise, which is lost from someone else due to the following expenses... Great Encyclopedic Dictionary
GROSS PROFIT, part of the gross income (div. GROSS INCOME) of an enterprise, which is lost from someone for the purposes of all expenses... Encyclopedic dictionary
Gross profit- is the amount of profit (surplus) from the sale of products (work, services), fixed assets (including land plots), other business and income from sales transactions, changed to the amount costs for these operations. Legal dictionary understand- total, total profit of the enterprise, withdrawals for the previous period from all types of commercial and non-viral activities of the enterprise, recordings in its balance sheet; part of the added value that is lost from... Encyclopedic Dictionary of Economics and Law
The Lord's activity of enterprises leads to a profit. Vaughn becomes an exponent of the cruelty of all our fellow soldiers. Gross profit characterizes the effectiveness of all the capabilities of the organization.
For certain types of enterprises, the designated gross profit is subject to change. Not everyone can make use of this economical display.
The productivity of various companies is equal to the VP indicator. It is in the middle of the organization that additionally calculates the gross income of other types of goods in order to analyze the effectiveness of product production.
What is VP
Gross income is the amount of received benefits from different types of work, changed by expenses incurred. For example, the main income comes from the sale of goods, so the first profit will be spent. The difference between two values will be the gross profit for the main type of work.
The gross income from all possible types of work is calculated in a similar manner. What’s important is that trading will have a large proportion of the selling price and the gross price. To generate gross profits, you need to use a simple formula, since cooperation includes the absence of warehouses, which are subject to regular rules.
When trading, I understand the resulting profit through the intermediary between the end-user and the grower. The organization must buy the products from the manufacturer at a price close to its own market price, and then send them to the retail outlet for sale to customers at its own markup.
VP - the difference between the amount of product acquisition and its implementation. The significance of the gross and net profit is that it is equal to the income transferred to the obligatory recovery and recovery. The gross profit does not cover the expenses for the payment of taxes and inevitable payments.
See the gross profit
Let’s take a look at the specifics of gross profit for different periods:
- Gross profit of the economy- it is more clear to understand how the values of the economic indicators of the countries are determined. This is calculated as the difference in GDP and expenditure on production, including wages, purchases of raw materials, imports, etc. As a result, the gross income of the economy characterizes the income and surplus of residents from sales of goods and other types of income.
- VP under implementation- this is a complex type that arises mainly from the sale of specific goods and services. This does not include the payment of dividends and other liabilities.
- Gross profit for the bank. This is the entire income of the financial system, deducted from operations, without any medical expenses. The won is made up of income from profits, dividends, and income from operations.
- Net gross income- The difference between all the lost income and expenses. First, I add up all the deducted income, then determine the size of the value of the sales of services and goods of the organization.
Gross profit will be the main indicator of profitability and income. They often rely on analyzing the effectiveness of a business.
Gross income boost
In order to correctly calculate the OP, it is necessary to cover all expenses without fault, including damages to the goods. In the interest of cooperation, we understand the complex of costs for the penny equivalent of the manufactured goods.
There are two types of reasons for the size of gross profit. Before the first step, internal officials bring to the fore what lies under the management of the enterprise:
- rapid growth of production obligations;
- increased assortment;
- sales efficiency;
- vykonannya shodo її increased;
- decrease in primary warmth;
- product quality;
- the marginal significance of vikoristannya of virobnichesky efforts;
- effectiveness of advertising companies.
Outsiders respect those who are unable to understand:
- natural and environmental factors;
- medical science;
- legal acts;
- external reasons that influence the supply of vehicles and resources;
- stimulation of business from the side of the state;
- economical and political country near the country;
You should pay attention to the reasons why you can invest. They contain demand for goods.
Price adjustment
Let's look at the organization of pricing policy. In the minds of the crisis, the organization’s leadership can competently approach price determination. A correct approach to companions is required in order to obtain a minimum amount of money for their earnings.
However, a permanent reduction in prices will greatly increase the turnover of goods, but will not always ensure the financial goodness of the organization. Better yet, if you have a good product at a reasonable price, you will sell it more cheaply.
When analyzing profitability, knowing the exact purchase price, it is possible to expand the output of the required products, reducing or increasing another category of products. This will help to remove profits from demanded goods and reduce expenses on unclaimed goods.
Formula for rozrakhunku VP
There are a number of types of gross income, and, consequently, formulas for this division. The classic formula for the expansion of VP is simple and clear - the difference between net income from sales and the first price of the product (company). To replace the net income, change or operating expenses and the amount of contributions should not be taken into account.
VP = P - W
VP- gross profit;
P- income from sales of products;
Z- product consistency.
In order to optimize the value of VP, they begin to use the expense clauses introduced at the beginning of the year, and dispose of the deposits that were not made before the start of the changeover.
Focusing on expenditures on production and sales of goods, you can accurately calculate the gross profit for the current period.
Organizations of distribution and wholesale trade
Organizations that rely on sales prices need to insure the financial result of the bank using a different method. The fragments of the property are sold at the price paid by the purchaser, actually written off from the stock market 90 at the price of the sale price. Otherwise, it seems that the proceeds from the buyer are equal to the amount that is written off from the credit account. 41-2 in debit rah. 90 for the sub-rack “Sobivartist”. To find the financial result, write off not the sales price, but the difference in the distributive and added price - cancel the trade margin on the market. 42. This retail will be gross income or realized expenses.
After third-party trading, there is a markup on prices. 90 balances the credit balance, which will be the gross profit from the sale of products.
Rozrakhunok for goods turnover
It is permissible to select different organizations, since all goods are sold under the same trade nationality in a multi-unit market.
When trading goods, you must respect the foreign trade with the maximum permissible value, which is prescribed in paragraph 2.2.3 of the Methodological Recommendations No. 1-794/32-5.
FD for goods turnover:
VD = T * RN
T- general size of goods circulation, for wholesale organizations vikorystvuyut wholesale goods circulation in warehouse and transit;
RN- Rozrahunkova mark-up:
RN = TN/(100% + TN)
TN- A trading markup has been established.
Let's take a look at the butt. The store has a 30% markup on the entire assortment. Revenue for the analysis period is 170 thousand. z urahuvannyam PDV.
pH = 30% / (100% +30%) = 0.23
VD = 170,000 * 0.23 = 39,100 rub.
If the trading margin has changed during the turbulent period, then the alternative method can be used to determine the insurance coverage for the turbulent periods.
Search for assortment of products
The method of merchandising is to establish different trade mark-ups for different types of goods.
Gross income is insured:
VD = (T1 * RN1 + ... + Tn * RNn) / 100
Product volume (T) and rozrakhunka markup (RN) are taken separately by group.
butt. The store sells dairy products at a markup of 25%, and bakery products at a markup of 20%. Revenue for the period from the dairy department was 120 thousand. rubles, and bread - 90 thousand. rubles
Rozrahunkova markup for dairy products RN = 25 * (100-25) = 0.2. Obligation of sales invoice VD = 120,000 * 0.2 = 24,000 rubles.
Rozrakhunka markup for bread product RN = 20 * (100-20) = 0.17. Obligation of sales invoice VD = 90000 * 0.17 = 15300 rubles.
Zagalny obsyag gross income: VD = 24,000 + 15,300 = 39,300 rubles.
When changing the markup of the sizes, carry out separately by group.
Gross profit below the average wage
The greatest expansion method in retail trade. VD means:
VD = (T * P) / 100
T- goods turnover
P- average height of VD:
P = (Nn + Rp-Nv) / (T + Ok) * 100%
Nn-mark-up on goods that were left over at the beginning of the winter period. This is the balance of the 42nd cob period.
Np- mark-up on goods (monthly turnover per rakhunka loan 42).
Nv-surcharge for goods that are vibuli (monthly debit turnover for RUR 42). Goods that have been received are subject to documentary evidence: returned to the postal owner, written off to the buyer, etc.
OK- surplus at the end of the period (balance 41.2)
butt. Bukhoblik has a surplus per rack of 41.2 – 80 thousand, behind a rack of 40 – 15,514. The product supply for the period is 120 thousand. rubles, the markup on them is 27,692. Revenue for this period is 165 thousand. rubles The number of products has not been recorded. The surplus of goods during the winter period is 35 thousand. rubles
P = (15,514 +27,692) / (165,000 + 35,000)) * 100% = 21.6%
VD = 165,000 * 21.6% = 35,640 rubles.
VD for a spare assortment
The method will rarely stagnate, as you will need the amount of the charged, sold markup for all items. Since it is possible to look for a specific product, it is better to conduct a book at purchase prices.
Gross income:
VD = Nn + Np-Nv-Nk
Nn- surcharge for the period on surplus: account balance. 42;
Np- Surcharge on goods received during the winter period: credit turnover Rakh. 42;
Nv- markup on the product that you have purchased: debit turnover rah. 42;
Nk- Surcharge at the end of the period on surplus: balance rakh. 42.
Features of the structure
- To generate revenue for a commercial organization, you can purchase cash, issued goods, intangible assets that are on the balance sheet, valuable papers, other goods, and services.
- The proceeds from the sale will be income from the sale of previously purchased goods, paid services, and other businesses.
When decommissioning, it is necessary to review the data of all expended articles for obvious reasons. The complexity of the structure is that it is necessary to include all income and low expenses for production and social activity.
The current and clear accounting form significantly simplifies the breakdown of gross profit. You can find out the required statistics of expenditures and income from your supplier.
Business income
Not everyone has clear statements about the concept of gross profit of an enterprise. They often get confused with accounting profits.
VP- income from the sale of products, which is calculated through the attenuation of the gross amount of revenue after the sale of the product, the maximum allowance, the tax and the excise tax on production and sales, included before the sale. The main part of the VP consists of income from sales.
Accounting profit is a general gross profit, a favorable financial result, which is calculated according to the organization's bookkeeping data for the required period. When it is necessary to ensure all government procedures and statistical balance.
Accounting income based on two principles:
- the idea of capital accumulation and stabilization;
- understanding of efficiency, increased capital.
Enterprise income
There are many views on the concept of “income”. Some value the increase in financial assets during the expansionary period from investments made by the founders of the assets, thereby improving their well-being. This figure is based on the thesis of A. Smith: income is the amount that is spent, without skimping on a portion of the main capital.
Vikladena thesis took the name of the idea of profit, formed on changes in the balance of the organization: liabilities - assets, assets - resources. The method is effective only for the growth of assets and short-term liabilities, as well as expenses. Income is growing in financial resources, and earnings are short-lived.
Another understanding of income is the difference between the amount of income taken and expenses incurred. Income becomes the result of a competent division of revenues and expenses over the periods. Income becomes an asset, and spending becomes a liability in future periods. This is the basis for the accounting entry that creates the final financial result.
Accounting income of an enterprise
Accounting profit is taken into account the difference between internal income and external expenses:
PB = VD - IV
PB- Accounting profit;
VD- River income of the organization as a result of government activity in penny equivalent (the difference in revenue and expenses allocated for withdrawal);
IV- Expenditures on production of products (sobіvartіst) - wages, material expenses, loans.
External expenses will be transferred to the purchase price of the product.
Expansion of economical profit
Economic income is income that is lost in the organization after the elimination of obvious and implicit expenses.
P = CD - I
P- profit;
І- Sukupni debit;
CD- aggregate income.
Serious allowances during the decompensation appear when people mislead the classic income from the gross one. The video will help the economist explain the peculiarities of these two different things and understand.
The growth of gross profit is a significant quarter and the quarter is incomplete and empty. Data cannot show the real situation. As a rule, dissection is carried out once per river.
The trace is important to place before the division of VP in the creation, so as to allow for complete recovery, increase the pressure of work, increase the potential of volunteers, and promote net income for the future. The main objective of the trade process will be rational and economical.
The activity of any company is aimed at generating profits, which is a clear indicator of the integrity of its activity. Gross profit is characterized by the rationality of the recovery of all resources of the enterprise.
Understanding gross income
Profit - this divided the cost of production of products (delivery of services) and the proceeds from their earnings.
Gross profit shows the effectiveness of the enterprise. The goal is to place product quality before sales income.
Equal gross income from the net, it is important to remember that the income is formed not only from expenses for production, but from taxes.
Calculation formula
The breakdown of gross profit can be done as follows:
VP = D - (Z + Z), de:
- VP - gross profit;
- D - obligation to sell manufactured products (services) in money.
- C – variety of production of products (or services);
- Z - Vitrati virobnitstvo.
For expansion, it is necessary to ensure that the amount of proceeds is consistent with the products (services) sold.
Formula for gross profit for financial reporting
The indicator “Gross Profits” (row 2100) is calculated as follows: from “Viruchki” (row 2110) the “Sales Composite” (row 2120) is added.
The essence of a competent breakdown of the amount of gross income lies in the reporting of all expenditure items that are included in the production of products (services that are expected). It is necessary to insure all the insurance claims, especially those not insured that appeared immediately before the production of goods (services).
It is important to understand the value of the property: the resources spent on production and production (services) are based on the expression of the varnish equivalent.
As long as there is a full-fledged indication of expenditures on output and production (services), it is possible to deduct a further increase in the size of gross income for the selected period.
Officials, why should they invest in gross profits?
The gross profit is large until a great number of factors flow in. The results are divided between the management of the company and the independent ones.
The first group of factors includes the following:
- an indicator of the growth in the production of goods (services) and their production;
- in-depth competitiveness and quality of goods (services) in general;
- expansion of the range of goods (services);
- changes in the quality of production;
- improving staff productivity;
- outside the collection of production funds;
- systematically monitoring the marketing strategies of the enterprise, and, depending on the needs, their adjustment.
Among the factors that are not under control are the following:
- natural, ecological, territorial, geographical minds;
- introduction of amendments to legislation;
- change the policy of supporting business by the state;
- transport and resource transformations on a global scale.
As a result, it is necessary to develop a strategy for management, which is easily amenable to adjustment, and the ability to quickly transform the policy of production and sale of products (services).
Consider the release and implementation
These actions may be directed to support the company at the optimal level. The first category of factors is subject to adjustment and delivery from the side of the strategy to the management of the enterprise. With greater commitment to the production and sale of products (services), the enterprise immediately increases turnover, which positively contributes to the growth of the market.
An important role is played to maintain the pace of production of products (services) to achieve high positions and try to prevent their changes, thereby negatively affecting the size of gross profits.
It is important to note that finished product inventories negatively impact the business picture, being a surplus for the business. This implementation would help increase revenue.
Some businesses use a variety of methods for the most efficient implementation of these unclaimed surpluses, which can be used to turn around some of the resources allocated to them. Ale danі dіi is an insignificant contribution to the gross profit.
Gross profit, a formula that includes such a term as “co-operation”, indicates those that still require regular monitoring. It is important to use innovative production technologies, explore and develop optimal options for delivering viable products, explore energy-saving resources and their alternative sources. These terms will help to significantly reduce the cost of production, which will result in an increase in gross profit.
What can you add to the size of the “gross profit” display?
The breakdown formula shows that the analysis indicator can be influenced by the pricing policy of the enterprise. High competition forces entrepreneurs to reconsider their pricing policy. In case of a permanent decrease in the price of goods (services), please cancel your application. It is better to choose a strategy for setting the optimal price and trimming it, steadily reducing profits, no matter how small. In addition, it is important to regularly analyze the product in order to quickly understand the effectiveness of any product (service). Even though the sale of products that generate profits allows the company to earn the maximum possible gross income, simultaneously increasing the amount of net income.
It is also important to maintain the level of material reserves that are currently not required. Saving them for everything does not pay for itself, so it is important to quickly disburse to reduce these reserves. Costs, taken away in this manner, will increase the size of the gross profit.
Such income figures, such as income from deposits and shares, property rental and other items, also contribute to the growing gross profit of the enterprise.
How to properly distribute your profits
Having lost a lot of goods and lost a lot of income, it is important to properly manage it. This look might have spoiled my mother.
Most of the meeting is borrowed from the gross profit.
- rent;
- payment of interest on loans;
- all kinds of taxes;
- beneficence.
The result is a net profit.
From the net profit comes the following statistics:
- forming the social infrastructure of the company and the state;
- training to staff;
- environmental foundations;
- penny reserves;
- power income of power organizations.
As a result of this division of gross income, the enterprise loses the opportunity for optimal development, advanced production, and increasing the potential of personnel. It is also possible to increase the size of the net profit.
Summary
Gross profit is profit minus income. There is a decrease in net income for those who do not incur significant operating expenses, as well as the amount of donations.
Gross profit formula:
PV = B - C, de:
- B – viruchka;
- S – sobivartіst.
To find the optimal size of gross income, it is important to first calculate the cost of expenses that are included in the supply of goods (services), including those that have not previously been accepted. Taking into account all the costs involved in the production and production of goods (services), you can accurately calculate the gross profit in the following terms.
Effective commercial and financial activities, whether business or business, are subject to the need to measure certain economic indicators. It is necessary to analyze the results of operations and identify their profitability. Up to one of the main indicators there will be a gross profit.
Gross profit is not a gross profit, but is taken out before the end of all recovery and recovery. This can be considered as an indicator of the excess of income over the total income, including depreciation of fixed capital and income, deducted from power.
Profit is the final result of business activity. However, during the light period there may be additions and additions. There may be large expenditures on production or lower, planned income from the sale of goods and services. Therefore, the correct structure of the demonstrators is the brains of the profitable activity.
These deductions compensate for the profit and do not bring them to the deduction. Zagalny waste of the enterprise that enters the warehouse and pays for the rakhunok profit is usually called the stink of waste of the boot. Which is responsible for the economic profit versus the gross profit. Before you can recover your gross profits, you need to spend money. The difference between these expenditures is the same as gross profit. The economic income of the enterprise is increased from the gross income by the amount of inputs not included before inputs.
Therefore, any business may refuse to withdraw economic profit, which is the final indicator of the total income withdrawn. It shows that the enterprise is recouping its investments in production and can now independently finance further development.
There are many indicators of the profitability of an enterprise and the value of profit. Won is indicated in hundreds and equals. Ale gross profit is one of the main indicators. The won represents the amount of income received from the main activity. This is the amount of income from the mine, including fixed assets, total income, deducted from all operations, not related to sales, which shows all expenses that were incurred as a result of this єї activities.
This indicator further reveals the results of business activities. As a result, it is possible to determine surplus and surplus government operations. This allows for economical analysis and identification of optimal development paths.
Economic analysis is very important in the skin business, regardless of the type of service or product it sells. What is important for proper planning and organization of work? For a negative display of activity, it is necessary to identify problematic problems, spending on which exceeded the planned ones. Reducing the profitability of products, which means spending on their production, is one of the ways to increase the gross profit from their sales. The income itself provides the opportunity for further development of enterprise, introduction of new technologies, establishment of new technological equipment and rational stagnation of material resources and labor. The correct additional investment of the generated profit for the development of production will pay off in a matter of minutes. The main thing is to ensure that the production process is rational and economical. To maximize the benefits of organizing production, there are indicators of gross