How to calculate the profitability of the enterprise Bashny.Net

If you are treated to a lender or investor, you are probably faced with this notion, as the profitability of the enterprise. What is it? How do you calculate? What influences this indicator? These are the questions we'll answer you.

What is the profitability of the company?

If we turn to the definition, the profitability - a relative measure of economic efficiency. Profitability is measured as a percentage, and is calculated by dividing the profit for the amount of assets and resources, its form.

Thus, the profitability of the company is an indicator showing the degree of efficiency of use of enterprise in the activity of property assets (working capital and equity). The main sense of profitability calculations to show how much profit is obtained now on each ruble invested in its production facilities.

The level of profitability is influenced by many factors: the capital structure, its sources, structure and value of the assets, the degree of involvement of productive resources in the activities of the company, the cost of working capital, their sources, the amount of sales revenue, the value established for the reporting period costs.

The formula for calculating profitability
Pn = B / (average BPA + average OA), where
P - the company's profitability;
B - tax profit for the reporting period;

BPA average - average value of fixed assets of the company during the reporting period;

OA average - average value of current assets for the period.

Balance profit enterprise

This is also called the accounting profit. In fact, this company's profit received in the reporting period, ie, pre-tax profit. To obtain this value, it is necessary from the resulting from product sales and services revenue deduct the following indicators:

• cost of goods, works and services;
• selling costs;
• administrative expenses.

Do not forget to add to the amount received income from operating and non-sales activities. If these types of operations resulted in a loss - subtract it from the total.

The resulting value will be the company's profit before tax. If you take the accounting profit and loss statement (Form №2), then the value of the balance sheet profit is possible to "spy" on line "profit (loss) before tax».

The average values ​​of current assets and production assets

The average cost of fixed assets is determined by fairly simple way. We need to take the value of productive assets at the beginning of the reporting period and at the end, put them together and divide by two. The same goes for the definition of the average value of current assets.

If you take the balance sheet (Form №1), then the value of fixed assets, we see the line "Fixed assets».

The cost of working capital in the same looking statements. The values ​​at the beginning and end of the year can be found on the bottom line of the second section of the document, "Current assets". Also find the median.

Substitute all formula and find the company's profitability. Here is an example!

Example of calculation of profitability.

The company "Omega" in 2011 received 20 thousand rubles total profit subject to income tax. In this case, the value of its assets at the beginning of the year was 5300, and at the end - 10 200 rubles. The result of the second section of the balance of "current assets" as of 1 January 2011 amounted to 30,800, and at the end of 2011 - 30 500 rubles. Let us find the profitability of the enterprise.

The average BPA will be: (5300 + 10200) / 2 = 7750 rubles.
Average OA: (+30 30 800 500) / 2 = 30 650 rubles.
Profitability of the company is: [20000 / (7750 + 30650)] * 100% = 52%

52% ROI - a good result for the company. But for accurate analysis of profitability is better to make a comparison of its performance over time. If there is a growth in profitability, it can be argued that current management policy of the company is effective and leads to prosperity. If there is a decline in the index - should look for reasons for the decline of profitability of your business.

The company must be profitable - for this purpose, to be profitable, it is created. We hope that our information will help you to easily carry out the appropriate economic analysis of your company.