How to measure the profitability of an event
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The main indicator of the profitability of the event in a market economy is profit. All expenses, incomes, losses, business results are accumulated in it. Profit is one of the incentives for the social and industrial development of the enterprise.
Instruction manual
1
To assess the profitability of the event, it is necessary, first of all, to analyze the profit. To do this, evaluate the profitability as a whole for the enterprise, as well as for the divisions and types of activity - procurement, catering, transport and trade. In the process of analysis, it is necessary to study the implementation of the plan and the dynamics of profit, to measure the influence of factors on its volume. And the most important thing here is to identify, study and realize the growth reserves for net income.
2
Non-operating income, expenses and losses, changes in the amount of profits and losses from other sales, changes in the volume of goods turnover, the average level of gross income and the average level of distribution costs may affect book profit. Here, non-operating income, expenses and losses are of some importance, since they are the result of certain shortcomings in the operation of the enterprise, which, undoubtedly, must be taken into account when evaluating profitability.
3
Examine fines, penalties and forfeits. A large amount of fines paid may indicate a breach of contractual discipline by the enterprise itself, or by its partners and suppliers, which is equally assessed negatively. In this case, it is also necessary to assess the possibility of removing obstacles that impede the full and high-quality fulfillment of contractual obligations.
4
Among the points that should be assessed as positive in assessing profitability, it should be noted the growth of income from property rental, foreign exchange differences on transactions in foreign currency and foreign currency accounts, the growth of income on securities owned by the company, as well as the growth of dividends on shares.
5
It is negative to evaluate the identification of the profit and loss of previous years in the reporting year, as this indicates the shortcomings in economic work. Particular attention should be paid to losses from writing off debts for embezzlement, shortages or theft - this indicates problems with the preservation of property of enterprises. In this case, it is necessary to check the validity and legality of the write-off for each amount.
6
When evaluating profitability, it may be useful to compare the financial results of the best departments of the enterprise with the lagging ones. This will help to generalize their experience and take measures in the future to improve profitability, as well as prevent loss-making.
