How to calculate the profit of the enterprise

Since the calculation of the profit of an enterprise refers to management accounting, and that, in turn, is not regulated by anyone, such a calculation is formed based on the needs of the management of an individual enterprise. Each company may have its own way of calculating profits.

Instruction manual

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Depending on the field of activity, calculating the profit of an enterprise may be easier or more difficult. So, if an enterprise is engaged in trade, then calculating profits will be easier for it than for an industrial enterprise. Universal calculation can be done by accounting for the number of assets at the beginning and end of the reporting period. To do this, you need to separately calculate the different types of assets. Firstly, these are material values. These include materials that are not involved in the production of finished products, for example, equipment and office equipment. This asset can be calculated as the difference between the receipt of materials at the enterprise and their write-off.

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Further, raw materials are considered, that is, materials necessary for the direct production of finished products. It is considered by removing balances from warehouses and production. Count the finished products, money at the cash desk and in the bank account of the company. These are the main sources of profit for the enterprise.

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In addition, it is important not to forget about the money at the cash desk or on the account of the companies that are your partners, the loans you issued, the accountable money and the debts of customers. Immediately, in order to calculate the profit of an enterprise, it is worth considering an asset such as debts to suppliers.

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So, after accounting and comparing all assets at the beginning and end of the period, you get the total profit of the enterprise. But the calculation does not always end there, sometimes we need to know the balance sheet, gross, tax or net profit of the enterprise. Most often, managers and shareholders of an enterprise are interested in pure profit. It is calculated by subtracting from the balance sheet profit, which is the total profit of the enterprise received for the period from all types of activities of the enterprise, recorded in the balance sheet, taxes, fees, deductions and other obligatory payments to the budget.