Data for calculating business profitability
Posted: Sun Jan 12, 2025 5:03 am
* The companies of the holding company "Svoya Pekarnya" operate under a special tax regime, in connection with which, instead of the item "Current income tax" (2411), the amount of the mandatory payment of the single tax is displayed.
Let's analyze the financial report indicators necessary for assessing the effectiveness:
revenue from core activities (sales) - turnover of products (services), manufactured and sold (delivered), the main type of activity, calculated using the accrual method, excluding indirect taxes (VAT, excise taxes and import duties);
cost of sales — the sum of all expenses associated with generating income from the core business. Includes both direct costs (costs of materials, wages and insurance premiums for production personnel) and some indirect costs (for example, general production costs and depreciation);
Gross profit is the amount of profit from core activities, excluding indirect management and commercial costs;
sales profit or operating profit - a reflection of the financial results from operating activities, that is, from all ordinary business transactions;
the total amount of profit from all types of company activities (primary and additional), as well as from financial transactions before paying income tax, depending on the tax system, is reflected in the indicator of profit before tax (EBT);
net profit is a key result reflecting the financial results of a company's operations (the difference between income and expenses for a certain period).
In addition to the indicators considered, the bahamas phone data effectiveness of a company's financial achievements can also be assessed by other criteria, such as EBITDA.
Data for calculating business profitability
Source: shutterstock.com
The EBITDA information metric represents the profit from the main activities of the enterprise before deducting expenses for interest, taxes and depreciation. This value can be assessed using different methods.
One of them is adding the amount of depreciation for the reporting period to revenue (line 2200). Traditionally, EBITDA is used to analyze the financial condition of a company by external stakeholders (investors, banks, other creditors).
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"32 Methods of Finding and Attracting Clients"
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Formulas for calculating business profitability
The analysis of a company's performance is based on several profitability indicators, measured as a percentage of net profit to a specific indicator:
to common property - return on assets (ROA);
to turnover - return on sales (ROS);
to fixed assets - return on fixed assets (ROFA);
to invested funds - return on investment (ROI);
to equity - return on equity (ROE).
In other words, the criterion of efficiency is profit in relation to the indicator, the profitability of which is supposed to be calculated. The formulas for business profitability are as follows:
Return on assets, known as ROA
It means the ability to use the company's assets to generate income. It is important to consider whether the income is sufficient to cover the costs. Thus, the ROA value is a measure of the efficiency of using the company's equipment, raw materials, material resources and buildings. Negative values of this indicator indicate financial losses of the enterprise, while an increase in ROA indicates a more productive use of resources by the company.
Formula for determining the return on assets
ROA = P/CA × 100% ,
Where:
P — profit for a certain period of work;
CA is the average price of assets that were on the organization’s balance sheet at the same time.
Return on Sales (ROS) Index
Measures the ratio of net profit to total revenue of the enterprise. When identifying the ratio, instead of net profit, it is also possible to use total profit or income before paying taxes and interest on loans to the organization.
And the following designations may arise: the profitability ratio of sales based on total profit and the operating profitability ratio.
The calculation of sales profitability is made using the formula
ROS = P / V × 100% ,
Let's analyze the financial report indicators necessary for assessing the effectiveness:
revenue from core activities (sales) - turnover of products (services), manufactured and sold (delivered), the main type of activity, calculated using the accrual method, excluding indirect taxes (VAT, excise taxes and import duties);
cost of sales — the sum of all expenses associated with generating income from the core business. Includes both direct costs (costs of materials, wages and insurance premiums for production personnel) and some indirect costs (for example, general production costs and depreciation);
Gross profit is the amount of profit from core activities, excluding indirect management and commercial costs;
sales profit or operating profit - a reflection of the financial results from operating activities, that is, from all ordinary business transactions;
the total amount of profit from all types of company activities (primary and additional), as well as from financial transactions before paying income tax, depending on the tax system, is reflected in the indicator of profit before tax (EBT);
net profit is a key result reflecting the financial results of a company's operations (the difference between income and expenses for a certain period).
In addition to the indicators considered, the bahamas phone data effectiveness of a company's financial achievements can also be assessed by other criteria, such as EBITDA.
Data for calculating business profitability
Source: shutterstock.com
The EBITDA information metric represents the profit from the main activities of the enterprise before deducting expenses for interest, taxes and depreciation. This value can be assessed using different methods.
One of them is adding the amount of depreciation for the reporting period to revenue (line 2200). Traditionally, EBITDA is used to analyze the financial condition of a company by external stakeholders (investors, banks, other creditors).
Read also!
"32 Methods of Finding and Attracting Clients"
Read more
Formulas for calculating business profitability
The analysis of a company's performance is based on several profitability indicators, measured as a percentage of net profit to a specific indicator:
to common property - return on assets (ROA);
to turnover - return on sales (ROS);
to fixed assets - return on fixed assets (ROFA);
to invested funds - return on investment (ROI);
to equity - return on equity (ROE).
In other words, the criterion of efficiency is profit in relation to the indicator, the profitability of which is supposed to be calculated. The formulas for business profitability are as follows:
Return on assets, known as ROA
It means the ability to use the company's assets to generate income. It is important to consider whether the income is sufficient to cover the costs. Thus, the ROA value is a measure of the efficiency of using the company's equipment, raw materials, material resources and buildings. Negative values of this indicator indicate financial losses of the enterprise, while an increase in ROA indicates a more productive use of resources by the company.
Formula for determining the return on assets
ROA = P/CA × 100% ,
Where:
P — profit for a certain period of work;
CA is the average price of assets that were on the organization’s balance sheet at the same time.
Return on Sales (ROS) Index
Measures the ratio of net profit to total revenue of the enterprise. When identifying the ratio, instead of net profit, it is also possible to use total profit or income before paying taxes and interest on loans to the organization.
And the following designations may arise: the profitability ratio of sales based on total profit and the operating profitability ratio.
The calculation of sales profitability is made using the formula
ROS = P / V × 100% ,