Return on fixed assets. Profitability of fixed assets and production assets

Profitability and its main types

Note 1

As you know, any organization carries out activities using a variety of objects of labor, within the framework of which we can conclude that financial condition any enterprise is influenced by such an indicator as the profitability of fixed assets. This means that fixed production assets must be used optimally and rationally.

Profitability can be called economic efficiency, which is expressed in an indicator reflecting the degree of efficiency in the use of resources, such as material, monetary, production, labor, etc. Thus, profitability is a general indicator of how effectively the organization under study functions. Profitability can be used to compare the profits and costs of producing a product or service.

Exist different kinds and types of profitability. The types that can be distinguished within the framework of the concept of “profitability” are represented by return on assets, return on fixed assets and return on sales. How these types of profitability are calculated can be seen in the figure below.

Figure 1. Methods for calculating some types of profitability. Avtor24 - online exchange of student works

The profitability of fixed assets is often called the profitability of fixed assets. This indicator can be calculated as the quotient of net profit divided by the cost of fixed assets, and multiply all this by 100 percent. The profitability indicator of production assets is the resulting integrated indicator of production efficiency. Within the framework of this indicator, the manifestation of other partial performance indicators is carried out, and only after that, the actual causes and factors of these indicators.

The profitability indicator of fixed production assets is especially important, since efficient use fixed production assets of an enterprise plays an important role in the development of the economy of the entire state within the framework of constant influence on the factors and conditions that determine the level and dynamics of the functioning of the means of production. The purpose of managing the efficiency of use of fixed production assets can be called the need to ensure organizational and economic conditions for effective application specific types means and objects of labor.

Let us consider in more detail the features of calculating this indicator.

Indicators for calculating the profitability of fixed production assets

Profitability within fixed assets helps analyze the profitability of the use of fixed assets that are involved in the production of a product or service of an enterprise in real terms.

Production assets are the means of production that are at the disposal of the organization, such as means of labor, represented by machines, equipment, buildings, vehicles, etc., and objects of labor, such as raw materials, materials, semi-finished products, fuel, etc. Composition of groups of production assets of an enterprise depends on the methods of manufacturing finished products or services, the complexity of the production process, the territorial location of the organization and other factors.

You can consider the structure of fixed production assets in the figure below.

Figure 2. Structure of fixed production assets. Avtor24 - online exchange of student works

• Take the net profit indicator in Form No. 2 of the “Income Statement” of the organization under study.
• Take the average value of fixed production assets from Form No. 1 “Balance Sheet” of the organization under study.

An example of calculating the profitability of fixed production assets

In order to visualize how the profitability of fixed production assets is calculated, let's consider an example.

Let's pretend that:

• the value of fixed production assets of the organization under study in 2015 was 1056 thousand rubles,
• the value of fixed production assets of the organization under study in 2016 was 1,632 thousand rubles.
• the net profit of the organization under study for 2016 was 1,983 thousand rubles.
• the average annual cost of fixed assets of the organization under study is 1344 thousand rubles.

We determine this indicator by calculating the arithmetic average of the cost of fixed assets for 2015 and 2016, which are indicated above.

So, let’s apply the formula discussed in paragraph 1 of this article: 1983 thousand rubles. / 1344 thousand rubles. x 100% = 147.5%. Thus, we can determine the real profitability from the use of fixed assets in 2016. It is 147.5%. This indicator is positive.

There are a number of indicators that affect the profitability of fixed production assets. Among them we can highlight capital productivity, the rate of turnover of fixed assets. For example, if capital productivity and the rate of turnover of fixed assets are at high level– the profitability of fixed production assets will be higher. Also, you can determine the degree of influence of each of the selected factors separately. For this there are various methods analysis.

Note 2

Some authors point out that it is advisable to represent the profitability of fixed assets as a function of changes in profitability of sales, capital intensity and turnover working capital, that is, all indicators of the efficiency of use of production factors. This is due to the fact that these indicators reveal the essence of the economic processes of the organization under study, they are more dynamic and can more deeply reflect the cause-and-effect relationships, the formation of the profitability of fixed assets in the process of producing a product or service.

Within the framework of the fact that in the new economic conditions of sanctions, economic confrontation, import substitution, etc., it is necessary to pay Special attention quality of management of fixed production assets, monitor their profitability on an ongoing basis.

Every businessman wants his enterprise to be successful and bring in a stable high income. A number of financial and economic instruments are used to analyze production efficiency.

They may differ in calculation complexity, availability necessary information and benefits to the inference process.

One of the most important efficiency parameters is production profitability, the calculation formula for which is quite simple, and its contribution to understanding the economic situation at the enterprise is truly enormous.

What is enterprise profitability

Profitability (RO - returnon) is the most important indicator of the economic efficiency of the organization as a whole, or its use of capital and resources (financial, material, labor, etc.).

The indicator allows detailed analysis economic activity enterprises, as well as to compare the values ​​of economic efficiency with similar indicators of other enterprises, which allows us to draw conclusions about the success of one or another area of ​​the organization’s activities.

Unlike profit, the value of the profitability ratio is a relative indicator, which makes it possible to compare enterprises different directions activities and different sizes.

The coefficient allows you to compare the efficiency of a small enterprise consisting of five employees with the activities of a large factory with a staff of over a thousand people. And if a factory can easily outperform a tiny company in terms of profit, then relative indicators can show a completely different picture.

In this regard, the profitability of an enterprise can be compared with economic efficiency - coefficient useful action enterprises.

In the simplest terms, profitability demonstrates how much profit each ruble invested in the organization's resources or assets brings.

Economists take into account a large number of types of profitability, among which the main ones are considered to be:

• return on cost/production (ROTC – totalcost),
• return on assets (ROA – assets),
• return on investment (ROI – invested capital),
• personnel profitability (ROL – labor).

Profitability of production or cost is considered one of the main coefficients taken into account when analyzing the efficiency of a particular production process. Many novice entrepreneurs may have a question: how to calculate the profitability of an enterprise or production.

The general formula for calculating production profitability is as follows:

ROTC=(PR/TC)*100%

Here PR is the profit from the sale (sales) of products, which, in turn, can be presented as the difference between the indicators of income (revenue) and expenses (full cost). PR=TR-TC.

The value of the total cost itself (TC, an abbreviation for totalcost) includes full list enterprise costs.

Expressed as a percentage, this indicator very clearly describes how effectively an organization uses production resources. In absolute values, you can see how many kopecks of profit from sales each ruble invested in the cost of the final product will bring to the enterprise budget.

In the hands of an experienced analyst, such information can become a real treasure trove. useful information, allowing you to compare the efficiency of various production lines and the payback of a particular product. A competent manager will be able to draw conclusions for himself - the production volumes of which goods should be increased, and which ones, perhaps, should be stopped producing altogether.

What can a change in the coefficient tell you?

If you trace the dynamics of changes in production profitability over a certain period of time (several months or years), you can draw certain conclusions:

The coefficient increases:

• The quality of products is increasing.
• The profit of the enterprise increases.
• The cost of finished products is reduced

The coefficient decreases:

• The importance of production costs is growing.
• Product quality is getting worse.
• Production assets are used less efficiently.

The information necessary for the calculation can be partially obtained from financial reporting data, and partially from accounting analytics. Thus, the value of balance sheet profit is stated in the income statement, or more precisely, in line 2300 of Form 2 “Profit (loss) before tax.”

Thus, based on the balance sheet data, the production profitability ratio can be calculated using the following formula (a calculation example in this case is extremely simple, so we will not give it):

Krp = line 2200 (Form 2) / line 2120 (Form 2) * 100%

How to use the indicator correctly

The profitability of an enterprise can become a universal tool that perfectly characterizes the economic health of a company and shows its success in comparison with its closest competitors. In the following situations, the ability to correctly “read” numbers and make far-reaching and correct predictions based on them can become a very valuable factor:

• In the process of enterprise management. A manager, armed with the values ​​of an enterprise's profitability ratio for a certain time period, and also able to analyze their values ​​and dynamics, is able to quickly determine the weak and strong points of the production process.
• To forecast expected profits. Knowing the average profitability values, the analyst can reasonably high degree probability of predicting the amount of profit that a specific production line or the entire enterprise as a whole will bring.
• Attracting potential investors. Such a universal indicator as the overall profitability of an organization can become the best recommendation for investors. Knowing these ratios and the approximate amount of his future investment, the investor can easily calculate the expected amount of his benefit.
• In case of sale of the enterprise. If a company is put up for auction, high profitability ratios will help attract large buyers and present the trade object in the most favorable light.

What factors can influence the value of profitability?

There are a lot of such factors. They can be divided into two large categories - exogenous and endogenous. The following are considered exogenous:

• Level of competition in the market. Competition directly affects the price of finished products, and therefore the amount of profit.
• Geographical factor. Territorial location production capacity can also have a significant impact on the price of goods produced.
• Features of tax policy. The tax policy of the state directly affects the amount of profit received from the sale of goods.
• Political factor. As an example, consider the sanctions imposed on Russian Federation a number of European and North American countries. Some types of production lost markets and significantly reduced their profitability indicators. Others, on the contrary, got rid of foreign competitors, which affected their economic indicators in the most positive way.

Endogenous factors (in other words, not directly related to the production process) can be considered:

• Efficient and modern marketing and logistics services. Their work directly affects the costs of the enterprise.
• A set of measures aimed at eliminating the harmful effects on environment. If such measures are implemented in accordance with current legislation, the costs are included in the costs of the enterprise.
• Financial policy of the organization. This category is extremely multifaceted, has many aspects, and can have a significant impact on all profitability indicators.
• Creating conditions for implementation labor activity. A satisfied employee will always be able to do more than a dissatisfied one. This truism helps many insightful businessmen increase labor productivity and reduce the cost of producing a particular product.

In turn, endogenous factors that directly affect the profitability of an enterprise can be divided into two categories:

• High quality. Introduction of new technologies into the production cycle that save resources and increase labor productivity.
• Quantitative. Expanding staff, increasing production capacity, opening additional production lines.

Of course, all these factors can play their role only if they are economically justified. For example, if the number of products sold has been steadily declining over a long period of time, then there is no point in expanding the number of employees.

Let's try to compare the indicators of production profitability ratios of two enterprises. Let's call them Enterprise 1 and Enterprise 2. As initial data we will use the total cost and revenue, the values ​​of which are presented in the table for clarity:

Profit from the sale of goods for each organization can be calculated as the difference between the values ​​of revenue and total cost:

PR1 = TR1 – TC1 = 2,500,000 – 800,000 = 1,700,000 rubles;

PR2 = TR2 – TC2 = 3,400,000 – 1,500,000 = 1,900,000 rubles.

It is clearly seen that the profit from sales is higher for the second enterprise. This means that in absolute terms, Enterprise 2 will receive more profit than Enterprise 1. But does this mean that it can be considered more successful and efficient? To answer this question, it is necessary to calculate a relative indicator of efficiency, which will be the profitability of production.

Applying the formula for calculating the profitability of an enterprise, we obtain the following values:

ROTC1 = (PR1 / TC1) * 100% = (1,700,000 / 800,000) * 100% = 212.5%

ROTC2 = (PR2 / TC2) * 100% = (1,900,000 / 1,500,000) * 100% = 126.6%

Here we see a completely different picture. The profitability of the first enterprise turned out to be almost twice as high as that of the second. This means that even with less real profit, Enterprise 1 operates almost twice as efficiently as Enterprise 2.

In this way you can easily produce comparative analysis activities of even the most seemingly incommensurable enterprises.

For example, you can compare the production efficiency indicators of a large plant with a team of 10,000 people and branches in a dozen major cities with a small workshop producing a single type of product, the entire staff of which is 5 people. And it is not always possible for a large plant to be ahead in such an unspoken competition.

As you can see, the value of the coefficient is calculated quite easily, and its importance for assessing the economic efficiency of any aspect of an enterprise’s activities is difficult to overestimate. All this makes the profitability of an enterprise or production the most important parameter, which should not be neglected under any circumstances.

For greater visibility We invite you to watch video materials devoted to the calculation of the production profitability ratio, methods of its analysis and valuable advice to increase its values.

Source: http://svoedelo-kak.ru/ekonomika/rentabelnost-proizvodstva.html

Profitability ratios

Profitability– a relative indicator of economic efficiency.

Profitability comprehensively reflects not only the degree of efficiency in the use of material, labor and financial resources, but also the use of natural resources.

The profitability ratio is calculated as the ratio of profit to the assets, resources or flows that form it. It can be expressed both in profit per unit of invested funds, and in the profit carried by each monetary unit received.

Let's consider the main indicators characterizing the profitability of an organization:

Profitability is the resulting indicator of the performance efficiency of any company, in general view profitability ratios are calculated using the formula:

R = Profit (net, book) / production indicator

Overall profitability is a general indicator of the economic efficiency of an enterprise, industry, economy, equal to the ratio of the gross (balance sheet) profit received over a certain period of time (usually a year) to the average cost of fixed assets and the standard share of working capital for this period.

Total profitability ratio

The main and most common indicator assessing the profitability of an enterprise is the overall profitability ratio. This indicator is defined as the ratio of profit before tax to revenue from sales of goods, works and services produced by the enterprise:

KOR = profit (loss) before tax / revenue x 100%

KOR = page 140 / page 010 f.2 * 100%

COR = page 2300 / page 2110 * 100%

Return on sales ratio

The coefficient allows you to determine how much profit the company has from each ruble of revenue from the sale of goods, work or services. This indicator is calculated both as a whole and for individual product items.

KRP = profit (loss) from sales / revenue (net) from sales x 100%

KRP = line 050 / line 010 f. №2 * 100%

KRP = page 2200 / page 2110 * 100%

Return on assets ratio

Indicators of profitability of assets or its parts allow us to judge the effectiveness of investments in a particular activity. In general, the formula for calculating the return on assets ratio is:

KRK = net profit (loss) / capital * 100%

GRC = gross profit / capital * 100%

The choice of formula used depends on the goals set and the subject of analysis. Those. the formula for the balance sheet, for example, to determine the return on total capital ratio (RCAP) will look like:

KKAP = line 029 or 050 or 140 or 190 f. No. 2 / [(line 300n.g. + line.300k.g.)/2] x 100%

KKAP = line 2100 or 2200 or 2300 or 2400 / [(line 1600 new year + line 1600 kg)/2] x 100%

Return on net assets ratio: NNA = profit / net assets x 100%.

Return on current assets ratio: KTA = profit / current assets (or working capital) x 100%.

Return on assets ratio: KA = profit / average annual balance sheet currency x 100%.

Profitability ratio equity: KSK = profit / equity x 100%.

Profitability ratio of production assets: CPF = profit / average value production assets x 100%.

Production profitability ratio

Production profitability allows you to evaluate the efficiency of producing goods, providing services or performing work.

The indicator allows you to determine how much profit the company receives from each ruble of costs incurred.

CRZ = book profit (loss) / cost x 100%

KRZ = line 050 / line 020 f. №2 * 100%

KRZ = page 2200 / page 2120 * 100%

The calculation of profitability indicators in accordance with international standards can be found in this article.

To make informed conclusions based on the results of calculating profitability ratios, it is also necessary to take into account the following:

Time aspect - profitability ratios are static, reflect the performance of a particular reporting period and do not take into account the long-term return on long-term investments, therefore, when switching to new technologies, their values ​​may deteriorate. In such cases, it is necessary to evaluate profitability indicators over time./p>

Incomparability of calculations - the numerator and denominator of profitability are expressed in “unequal” monetary units. Profit reflects current results, and the amount of capital (assets) accumulated over several years is book (accounting) and does not coincide with the current estimate. Therefore, to make decisions, it is also necessary to take into account indicators of the company’s market value.

The problem of risk - high profitability can be achieved at the cost of risky actions, therefore, in parallel, for a full analysis of the company’s performance, the structure of current costs, financial stability ratios, operating and financial leverage are analyzed.

Source: http://afdanalyse.ru/publ/finansovyj_analiz/fin_koefitcienti/analiz_rentabelnosti/3-1-0-8

Calculation of profitability: formula and example for two enterprises

To analyze and calculate the efficiency of an enterprise, a wide range of economic and financial indicators. They differ in the complexity of calculation, availability of data and usefulness for analysis.

Profitability is one of the optimal performance indicators - ease of calculation, availability of data and enormous usefulness for analysis make this indicator a must-have for calculation.

Profitability (RO – returnon) – general indicator economic efficiency of the enterprise or the use of capital/resources (material, financial, etc.). This indicator is necessary for analyzing economic activities and for comparison with other enterprises.

Profitability, unlike profit, is a relative indicator, so the profitability of several enterprises can be compared with each other.

Profit, revenue and sales volume are absolute indicators or economic effects and it is incorrect to compare these data from several enterprises, because such a comparison will not show the true state of affairs.

Perhaps an enterprise with a smaller sales volume will be more efficient and sustainable, that is, it will bypass another enterprise in terms of relative indicators, which is more important. Profitability is also compared with efficiency(efficiency factor).

In general, profitability shows how many rubles (kopecks) of profit one ruble invested in assets or resources will bring. For profitability of sales, the formula reads as follows: how many kopecks of profit are contained in one ruble of revenue. Measured as a percentage, this indicator reflects the effectiveness of activities.

There are several main types of profitability:

• profitability of products/sales (ROTR/ROS – total revenue/sale),
• return on cost (ROTC – total cost),
• return on assets (ROA – assets)
• return on investment (ROI – invested capital)
• personnel profitability (ROL – labor)

The universal formula for calculating profitability is as follows:

RO=(Type of profit/Indicator whose profitability needs to be calculated)*100%

In the numerator, the type of profit is most often used profit from sales (from sales) and net profit, but calculations are possible on the basis of gross profit, book profit and operating profit. All types of profits can be found on the income statement (profit and loss).

The denominator is the indicator whose profitability needs to be calculated. The indicator is always in monetary terms. For example, find return on sales (ROTR), that is, the denominator should include the sales volume indicator in value terms - this is revenue (TR - totalrevenue). Revenue is found as the product of price (P – price) and sales volume (Q – quantity). TR=P*Q.

Formula for calculating production profitability

Return on cost (ROTC – returnontotalcost)– one of the main types of profitability necessary for efficiency analysis. Cost profitability is also called production profitability, as this indicator reflects the efficiency of the production process.

Production profitability (cost) is calculated using the following formula:

ROTC=(PR/TC)*100%

The numerator contains profit from sales/sales (PR), which is the difference between income (revenue - TR - totalrevenue) and expenses (total cost - TC - totalcost). PR=TR-TC.

In the denominator, the indicator whose profitability needs to be found is the total cost (TC). The total cost consists of all the costs of the enterprise: costs of materials, semi-finished products, wages of workers and administrative and management personnel, electricity and other housing and communal services, workshop and factory costs, costs of advertising, security, etc.

The largest share of the cost is made up of materials, which is why the main industries are called material-intensive.

Return on cost shows how many kopecks of profit from sales will be brought by one ruble invested in the cost of production. Or, measured as a percentage, this indicator reflects how efficient the use of production resources is.

Formula for calculating profitability on balance sheet

Many types of profitability are calculated based on balance sheet data. The balance sheet contains information about the assets, liabilities and equity of an organization.

This form is compiled 2 times a year, that is, the status of any indicator can be viewed at the beginning of the period and at the end of the period. To calculate profitability from the balance sheet, the following indicators are required:

• assets (current and non-current);
• the amount of equity capital;
• investment size;
• and etc.

You cannot simply take any of these indicators and calculate profitability - this is wrong!

In order to correctly calculate profitability, you need to find the arithmetic average of the amount of the indicator at the beginning of the current (end of the previous) and the end of the current period.

For example, find the profitability of non-current assets. The sum of the values ​​of non-current assets at the beginning and end of the period is taken from the balance sheet and divided in half.

In the balance sheet of medium-sized enterprises, the value of non-current assets is reflected in line 190 - Total for section I; for small enterprises, the value of non-current assets is the sum of lines 1150+1170.

The formula for return on non-current assets is as follows:

ROA(in)=(PR/(VnAnp+VnAkp)/2)*100%,

where VnAp is the value of non-current assets at the beginning of the current (end of the previous) period, VnAp is the value of non-current assets at the end of the current period.

The return on non-current assets shows how many kopecks of profit from sales will be brought by one ruble invested in non-current assets.

Example of calculating production profitability

To calculate the profitability of production, the following indicators are required: total cost (TC) and profit from sales (PR). The data is presented in the table.

PR1=TR-TC=1500000-500000=1,000,000 rubles

PR2=TR-TC=2400000-1200000=1,200,000 rubles

Obviously, the second enterprise has higher revenue and profit from sales. When measured in absolute terms, the effect of the second enterprise is higher. But does this mean that the second enterprise is more effective? To answer this question it is necessary to calculate the profitability of production.

ROTC1=(PR/TC)*100%=(1000000/500000)*100%=200%

ROTC2=(PR/TC)*100%=(1200000/1200000)*100%=100%

The profitability of production of the first enterprise is 2 times higher than the profitability of production of the second enterprise. We can confidently say that the production of the first enterprise is 2 times more efficient than that of the second.

Profitability, as an indicator of the efficiency of an enterprise, more accurately reflects the real state of affairs in production, sales or investment of the enterprise, allowing you to correctly respond to the current situation, in contrast to the use of absolute indicators, which do not give a complete picture.

about what profitability shows:

Source: https://delatdelo.com/spravochnik/osnovy-biznesa/rentabelnost/raschet-rentabelnosti-formula.html

Profitability of production assets

Any company strives to assess the profitability of a project when deciding whether or not to invest in it.

When carrying out his activities, any entrepreneur will always focus on the return on investment indicator. We can say that any area of ​​business must operate with sufficient profitability, otherwise it loses its financial meaning.

The factors on which the profitability indicator depends are numerous. In the first place among them are the fixed production assets of the enterprise, which include assets used by the enterprise directly in its activities. The form of fixed production assets always remains the original, while the value gradually decreases.

Definition 1

In the broadest sense of the word, profitability is the excess of profit over production costs (enterprise costs).

When less money is spent than received in the end, we can say that the business is profitable. This benefit can be used, among other purposes, to develop and further increase business performance.

Can not understand anything?

Try asking your teachers for help

The profitability indicator characterizes the efficiency of using invested funds and resources.

Note 1

A profitable business is characterized by a certain percentage of funds that are obtained as a result of actions with funds invested at the start (including fixed production assets). Therefore, the profitability indicator is always expressed as a percentage.

Profitability and Profitability

Profitability and profitability are various concepts, but have a lot in common. Without profitability, you cannot talk about profitability.

At the same time, the two indicators have a significant difference, which is based on the objectivity of the analysis. Thus, profitability reflects profit in numbers and is an absolute indicator. Profitability is a relative indicator that reflects the potential of an enterprise.

For example, an enterprise that made a profit of 10,000 thousand rubles. with a profitability of 15%, will be less profitable than an enterprise that received a profit of 2,000 thousand rubles. with a profitability of 80%.

Purpose of profitability assessment

Analysis of the profitability indicator does not need justification; it helps to solve some economic problems that arise for a business owner:

• Intentions regarding investments and other forms of cooperation;
• Identification of the level of profitability of the enterprise;
• Adjustment economic approaches to doing business;
• Comparison of the dynamics of indicators in accordance with different bases;
• Identification of less profitable assets or unprofitable activities;
• Assessing the quality of personnel work with production assets (for example, equipment);
• Search for reserves for increasing labor efficiency.

Profitability formula

To calculate profitability, you need to know the digital expression of net profit for the period of time under consideration (most often, a year is chosen during analysis), as well as the value of property assets (fixed production assets) for the same time.

To calculate the return that corresponds to each invested ruble, it is necessary to determine the ratio of these indicators. The formula for the profitability indicator is as follows:

$R=FC/ST \cdot 100%$

Here $R$ is the profitability ratio, IF is the indicator of the enterprise’s net profit for the selected period of time, ST is the cost of fixed production assets.

The profit and asset value indicator for the profitability formula is used in monetary terms (in rubles).

In some cases, instead of net profit, the value of balance sheet profit is used, the indicator of which can be found in reporting and accounting documents.

When calculating the profitability formula, information is taken from the following sources:

• balance sheet (form 1);
• report on the company's financial results (form 2).

Return on fixed assets

Due to the fact that property assets change their value over time, the time period of a year can be long and some figures will change their meaning.

Totals can be used for approximate calculations, but if more is required exact value, calculate the average cost of fixed production assets for the year.

To calculate the average value of fixed assets for the year, use the formula:

$STsr = (STnp + STkp) / 2$

Here STav is the average cost of fixed production assets for the period, STnp is the cost at the beginning of the period, STkp is the cost at the end of the period.

There is a formula that takes into account arrived and written-off fixed assets:

$SRst = STnp + STpf – STvf$

Here STpf is the value of incoming assets, STvf is the value of disposed assets.

In order to find out not only total percentage profitability of the company, and to determine its manifestation in the relevant area, it is necessary to analyze the profitability indicator for certain indicators.

In practice, most often used economic assessment according to several parameters.

Return on sales, which reflects the amount of income received from each monetary unit earned. Return on sales reflects the relationship between net profit (NP) and revenue (R) for products/goods sold. Formula for calculation:

$Rр = FC / V$

Using the profitability of funds, you can assess the quality of enterprise management and highlight the effectiveness of possible investments. This indicator can be determined by the ratio of net profit (NP) to the average cost of tangible assets (CPst):

$Rf = FC / SRst$

Through return on equity (Rk), you can determine the efficiency of using equity capital. The indicator is often used when comparing efficiency various enterprises or types of activities.

Return on capital can be determined by finding the quotient of net profit for the year (IPyear) to the average value of capital (STcap):

$Rk = IFyear / STcap$

All organizations carry out activities using various means of labor. This means that the financial condition of the company is influenced by an indicator called return on fixed assets. You can learn more about it from the following article.

Profitability is a general indicator of how efficiently a company carries out its activities. With its help, you can compare the amount of profit received with the costs incurred for the production of a particular product. That is, than smaller company spent resources, the better.

How to calculate the profitability of a PF

To calculate the profitability of PF, the amount of net profit is used, as well as the cost of funds in monetary equivalent. In some cases, balance sheet profit is added to the formula.

These indicators can be found in the book. balance sheet and financial report. results.

It is worth considering that the value of funds may change throughout the year, as they are introduced or taken out of service, and depreciation is charged on them. Accounting also includes leased assets. In this regard, at the beginning of the year the book value may be one, and at the end of the year it may be completely different.

To correctly calculate profitability, it is necessary to calculate the average annual price of the OF:

OFSR. year. = (FOR at the beginning of the year + OF for the end of the year) / 2.

OFSR. year. = OF at the beginning year + OF introduced. – OF retired

The formula for return on fixed assets is as follows:

Rof. = (Pch / OFavg. year) * 100%.

• Rof – profitability;
• Pch – net profit;
• OFSR. year. – average price OF for the year.

Indicator norm

Since organizations differ in size, specific production and industry affiliation, the exact rate of profitability of PF has not been established.

In the production sector, the norm for this indicator ranges from 10% to 35%.

In the metallurgy industry, OFs are expensive. In this regard, the norm is approximately 14%. This value, combined with positive dynamics, is one of the signs efficient work organizations.

Organizations engaged in trade should have higher profitability. This is due to the fact that fixed assets and non-current assets are very inexpensive.

Financial companies have slightly lower profitability. This is due to the high competition in this industry.

A decrease in profitability may mean that PFs are being modernized ineffectively. However, if the organization operates in an area where there is very high competition and production costs are not easy to reduce, the ratio may fall due to a decrease in profits or its slow growth. If revenue is high and profitability is low, it may be considered a secondary indicator.

If the profitability is too high (100-200%), then there is little competition in the industry and too high prices. It can be assumed that the organization uses cheap materials and saves on employee salaries.

What affects profitability

The profitability of PF is strongly influenced by the rate of turnover of fixed assets, as well as capital productivity. How more value these indicators, the higher the profitability. To determine the level of influence of each indicator separately, use various ways analysis. One of the most effective ways is the chain substitution method.

where P is the enterprise’s profit in the base and reporting years, which is determined as follows

P = Q – C pp - VAT,

where Cpp is the total cost of production in the reporting and base years, den. units;

VAT – value added tax in the reporting and base years, den. units

P o = Q o – C pp o – VAT o = 158 billion rubles - 122.4 billion rubles - 14.6 billion rubles =

11 billion rubles

P b = Q b – C pp b – VAT b = 151.2 billion rubles - 119.1 billion rubles - 14.2 billion rubles =

17.9 billion rubles

R f o =

R f b =

4. Determine the indicators for the use of working capital in the base and reporting years:

4.1. The working capital turnover ratio is calculated using the formula:

K rev = , revolutions per year,

where Q is the annual volume of product sales, we take it equal to the volume of manufactured products, den. units..;

OS с - average annual cost of standardized working capital, den. units

TO about O =

TO about O =

Duration of one revolution calculated by the formula:

D about =

where T is the duration of the period under consideration (T = 360 days).

D about =
days,

D about b =
day,

5. Determine profitability indicators in the reporting and base years:

5.1. The overall profitability of production is calculated using the formula:

R o =
100%.

5.2. Product profitability:

Rpr= 100%.

Rpr o =

Rpr b =

6. Determine the percentage reduction in product costs (expenses) in the reporting year in relation to the base year.

To do this, it is necessary to determine the costs per 1 ruble of manufactured products for the years being compared using the formula:

.

The percentage reduction in costs per 1 ruble of marketable products in the planned year compared to the previous year will be:

∆С=
100%

∆С=

4. Test task No. 2. Assessing the effectiveness of investments in the production of a new product

Based on the initial data (Table 4), determine the economic feasibility of an investment project for the production of a new product based on the calculation and assessment of the following indicators:

Net present value (NPV);

Payback period of investments (T OK);

Return on investment (R and).

4.1. Initial data for the option

Table 6 - Initial data for calculating the economic efficiency of the production of a new product

Evgeniy Malyar

# Business Dictionary

Calculation formula, main indicators

Calculating the profitability of funds is necessary to form an objective idea of ​​​​the effectiveness of their use.

Article navigation

• Calculation of profitability of fixed assets
• How to calculate return on fixed assets
• Profitability of production assets
• conclusions

The most expensive thing that every enterprise has (of course, in a material sense) is its fixed production assets. They determine the “price” of a company, its economic power, place in the market and, ultimately, its ability to generate cash income. It is not surprising that the management of any company pays close attention to the efficiency of using this most important asset.

Any, even the most advanced equipment, loses its usefulness if used irrationally. To create an objective picture and analyze it, economists use an indicator such as return on funds. The article will explain the essence of this value and provide ways to determine it..

Calculation of profitability of fixed assets

Profitability is often confused with profitability or profitability, and although these concepts are similar in meaning, they differ significantly. Already at the stage of purchasing advanced equipment, spending money on its delivery, installation and commissioning, the owner of the enterprise expects a beneficial effect. Each purchase is made on the basis of preliminary calculations, which take into account planned indicators of profitability, capital productivity and capital intensity.

Capital productivity is the ratio of the amount of product produced to the sum of the cost of fixed production assets.

FO = BB/OF

Where:
FO - Capital productivity;
ВВ – Gross output;
OF – cost of fixed assets.

The latter indicator is taken, as a rule, as an annual average. This will be discussed later.

Example - an automated line, for which the plant paid $10 million, produces 5 thousand cars per year. Every dollar spent on fixed assets “produces” 0.0005 (five ten-thousandths) of one car.

Capital intensity is “capital productivity in reverse.” The numerator and denominator of the fraction change places, and the meaning of the formula becomes the opposite.

To produce one car, you need to use fixed assets worth $2 thousand.

Profitability of use of fixed assets, in contrast to the above economic criteria operating absolute values– relative coefficient. It shows what share of the funds invested in the PF is profit:

ROS = PG / OS

Where:
ROS – Return on fixed assets (all);
PG – Annual profit;
OS – Cost of fixed assets.

In appearance, everything looks very simple, but in order to get an objective result, the accounting department should work hard, finding the information required by the formula on the balance sheet.

How to calculate return on fixed assets

The formula is filled in according to the balance sheet of the enterprise or based on current accounting data: PG (annual profit) is taken from Art. 2400 " Net profit(loss)” balance or account balance. 99 (“Profits and losses”). This source is regulated by orders 66n and 94n of the Ministry of Finance of the Russian Federation.

With the cost of fixed assets (FAs), there are somewhat more difficulties.

The average annual cost of PF is considered as the average arithmetic values at the beginning and end of the analyzed period:

Where:
OF – Average annual cost of fixed assets;
OSn – Cost of fixed assets at the beginning of the year;
OSK - The same as at the end of the year.

In this case, you should operate with residual values ​​(minus depreciation).

As a source of information you can use:

• Account balance 01 "Fixed assets". There, the costs are indicated taking into account depreciation (Order of the Ministry of Finance of the Russian Federation No. 94n).
• Art. 1050 of the enterprise’s balance sheet (at the beginning and end of the year);
• Accounting book "Statement of depreciation of fixed assets." This method is the most accurate, but requires a lot of labor. The calculation is made using the formula:

OS = OSn + OSvv x (N/12) – OSv x (12-N)/12

Where:
OS – Average annual cost of fixed assets;
OSn – Initial cost of fixed assets;
OSvv – Cost of newly introduced PF;
N – The number of months during which each introduced and retired fixed asset was operated in the analyzed year;
OSvyv – Cost of decommissioned PFs;

The accuracy of the latter method is beyond doubt. The arithmetic average does not take into account the date of introduction of equipment, sometimes very expensive and productive. However, in most cases, simplified forms for calculating the profitability of fixed assets are used, and in terms of their reliability, as a rule, the results are quite acceptable.

Profitability of production assets

An in-depth analysis of the efficiency of fixed assets involves selecting from among them the equipment directly involved in production process. To understand the economic meaning of this action, one should recall the characteristics of the enterprise’s fixed assets, namely:

• Multiple participation in the production process;
• Preservation of natural shape for a long time;
• Gradual wear and tear;
• Transfer of cost to manufactured products;
• Service life – a year or longer;
• Cost – one hundred minimum wages and more.

Many objects that are the property of a large enterprise (for example, executive cars or departmental kindergartens) do not bring direct profit, but, on the contrary, require operating costs.

At the same time, economists and managers are primarily interested in the efficiency of operating assets intended for production activities.

To calculate the return on productive assets, almost the same formula is used. The value of the OPF is determined from the balance sheet, for which analytical accounting data is used. The identification of direct production assets (machinery, equipment, automatic lines, etc.) is also important for determining other indicators that characterize the efficiency of the enterprise, in particular, capital ratio (the cost of the general operating fund divided by the number of personnel).

The profitability of production assets is determined by the ratio of the profit received to the cost of the general fund:

RPF = P / OPF

Where:
RPF – Return on production assets;
P - Net profit or loss for the year;
OPF - Average annual cost of means of production related to the fixed assets of the enterprise.

The calculation of OPF is carried out using the same methods as given above for the average annual values ​​of fixed assets, but using data from analytical accounting of only productive assets.