By generalizing approaches to determining the essence of profit and taking into account the requirements of current legislation, it is possible to determine the basics of the mechanism for the formation and distribution of profit of an enterprise.
Profit is formed as a result of the following components:
profits from sales of products, goods and services;
profit from operating income and expenses;
profit from non-operating income and expenses.
In aggregate, the profit from the sale of products (actually received) is calculated as the difference between the proceeds from the sale of products, taxes included in the price and paid from the proceeds, and the cost of products sold.
Profit expected from product sales, is determined taking into account the planned price of products that can be sold on the market; planned taxes included in the price; planned level of production and sales costs (cost); planned level of product profitability.
Profit from operating income and expenses is formed through the rental of assets, leasing, temporary use, from the disposal of fixed assets and intangible assets, participation in the authorized funds of other organizations. It is calculated as the difference between income and expenses.
Profit received from non-operating operations, is profit generated by subtracting from the income received from a given operation the expenses associated with the implementation of these operations (for example, funds received from writing off accounts payable, exchange rate differences, assets received free of charge).
Taxable and non-taxable profit, net profit or profit remaining at the disposal of the enterprise, is formed in the process of distributing the profit of the enterprise.
The formation of profit as a financial indicator of work, which is reflected in accounting and official reporting of business entities, is influenced by the procedure established by the state: formation of costs for the production of products (works, services); accounting and calculation of the cost of products (works, services); determination of non-operating income and expenses; determination of balance sheet (gross) profit. Consequently, the formation of the absolute value of the enterprise’s profit is influenced by the results, the efficiency of its financial and economic activity, scope of activity, conditions for accounting financial results determined by law.
Features of the distribution of profit of an enterprise depend on the economic and legal form of the enterprise and on the form of ownership. The common feature of the profit distribution mechanism is that the enterprise pays income taxes, real estate taxes, income taxes and local fees and taxes from profits. The differences lie in how the profit remaining at the disposal of the enterprise is distributed, since the procedure for distributing this part of the profit is established by the owner.
When distributing profits, the following are distinguished:
profit received from types of activities, subject to income tax;
profit subject to income tax;
preferential profit.
Profit subject to income tax can be received from the following sources:
video salons;
shares, bonds and other securities.
Income tax rates are differentiated by type of activity.
Preferential profit- This is profit that is exempt from income tax. For example, the preferential profit may include profit received from measures aimed at reducing the consequences of the Chernobyl accident; profit of production workshops, experimental enterprises and enterprises of educational institutions, received in the process of practical training of students and students; profit of enterprises employing the labor of disabled people, if the number of disabled people in their composition is at least 50% of the average number of industrial production personnel, etc.
In order to determine the amount of income tax, it is necessary to take into account that first the company is obliged to pay real estate tax from its profits. It is calculated based on the residual value of fixed assets listed on the balance sheet of the enterprise and the established rate of this tax. Taxable profit is determined as the difference between profit subject to income tax and the amount of property tax. It is the basis for determining income tax (the income tax rate is established by law).
In the process of profit distribution, the enterprise also determines the amount of profit, which is the basis for calculating local taxes and fees (profit subject to income tax, minus real estate tax, minus income tax).
The final stage in profit distribution is the calculation of the profit remaining at the disposal of the enterprise ( net profit), and establishing directions for its use.
The main direction of distribution of net profit is stipulated in the constituent agreement, charter and complies with the requirements of the law (for example, the presence of a requirement for the mandatory formation of a reserve fund presupposes that the enterprise makes appropriate regular deductions from net profit).
Federal Agency of Education of the Russian Federation
East Siberian State Technological University
Institute of Economics and Law
Faculty of Economics
Department of Finance and Credit
COURSE WORK
in the discipline "Finance of Organizations"
on the topic: “Formation of enterprise profit”
Completed by: student gr. 557-2
Bogdanova E.A.
Checked by: Ph.D.
Yakovleva I.A.
INTRODUCTION
The current state of the market economy implies strict requirements for the management system of an enterprise. Constant changes in the economic situation require a quick response from the management apparatus in order to maintain the financial condition of the organization and beneficially change the policy of the enterprise in the direction of the current situation.
In a market economy, the main activity of an enterprise is making a profit, this is the source of existence of the enterprise, the main goal and indicator of performance, the enterprise independently plans the development of its activities, based on the factor of demand for its products, its capabilities and the need for further development. The main task of generating profit is to identify changes in the distribution of profit and the components of its use compared to previous periods. The results of the formation analysis are the sources on the basis of which a plan for using profits in a given period is drawn up.
Profit - as a component element market relations, occupies a prominent place in the creation of a market for means of production, consumer goods, and securities. It plays an important role in stabilizing the economy and overcoming crisis phenomena. The enterprise must have a clear cost structure for all types of activities and strictly regulate them, constantly comparing them with the sources of profit. This requires a deep and comprehensive analysis of profits.
In modern economic conditions, economic analysis is becoming a powerful tool for increasing production efficiency at individual enterprises and in the national economy as a whole.
Based on the results of the analysis of enterprise profits, it is necessary to develop current and future measures to improve the formation financial resources, strengthening the regime of economy in spending funds, strengthening the role of the mechanism for generating and planning profits as an economic lever for intensifying production.
The purpose of the course work is to reveal the concept of profit, its essence, structure, functions, and to determine methods for generating enterprise profit.
This goal determined the formulation and solution of the following tasks:
consider the concept, types and functions of profit;
study methods of enterprise profit planning;
give general information about the enterprise;
consider the formation of profit of Ulan-Ude Pasta Factory CJSC;
consider net profit analysis;
identify ways to improve the distribution and use of profits in a market economy;
The object of study of this course work is the Ulan-Ude Pasta Factory enterprise. The subject of study is the formation of profit in an enterprise.
The course work consists of an introduction, two chapters, a conclusion, and a bibliography.
The first chapter discusses the theoretical aspects of profit planning in an enterprise. The second chapter contains an analysis of profit formation at the Ulan-Ude Pasta Factory CJSC.
CHAPTER 1. THEORETICAL ASPECTS OF FORMATION OF ENTERPRISE PROFIT
Profit: concept, types, functions
Profit, from a theoretical point of view, is a complex and ambiguous concept. In world science, there are still different approaches to the interpretation of its origin and essence.
Marxist theory treats profit as one of the forms of value. According to it, labor is the only commodity whose value is higher than the cost of its acquisition, and the capitalist extracts surplus value from this, i.e. the difference between the production costs of labor and its real value. However, Marxist philosophy did not receive worldwide support and dissemination. It explains little in the situation of the current mixed economy, the subjects of which are enterprises, entrepreneurs, and the state.
The concept of surplus labor is most suitable, for example, to a situation where an entrepreneur bought and immediately sold a product, making a profit. Its source, naturally, is the labor of the given entrepreneur.
At the enterprise, everything looks much more complicated. There, labor is combined with capital and together they are able to bring that additional income that will exceed the costs of labor and reproduction of capital.
It follows that profit is an economic category that reflects the income created in the field of economic activity. It is the result of the combination of different factors of production: labor, capital, natural resources, entrepreneurial ability. Together they bring the financial effect called profit.
In the process of entrepreneurial activity, as a result of the combination of production factors: labor, capital, objects of labor, products are created that become goods subject to their sale to the consumer.
The cost of a product is determined at the stage of its sale. It includes the value of past materialized labor and living labor. The cost of living labor reflects the newly created value and is divided into two parts: wages workers and newly created value. The amount of wages for workers involved in production is determined by factors determined by the need for reproduction work force. Therefore, for the enterprise it represents part of the production costs. Newly created value reflects net income, which is realized only as a result of the sale of products, which means public acceptance its usefulness.
In conditions of commodity-money relations at the enterprise level, net income takes the form of profit. Enterprises in the goods market act as relatively isolated commodity producers. They set the price for products, sell them to consumers, while receiving cash proceeds, which does not mean making a profit. In order to identify the financial result, it is necessary to compare revenue with production and sales costs, which take the form of production costs.
The financial result indicates the receipt of profit when revenue exceeds cost. An enterprise always sets itself the goal of making a profit, but does not always make it. If the revenue is equal to the cost, then the company has only managed to recover the costs of production and sales of products. At the same time, the sale of products took place without losses, but there is no profit as a source of production, scientific, technical and social development. If costs exceed revenue, the company receives losses - a negative financial result, which puts it in a rather difficult financial situation, which does not exclude bankruptcy.
Profit, as the most important category of a market economy, performs a number of functions. Firstly, profit is a criterion and indicator of the efficiency of an enterprise. However, it is impossible to evaluate all aspects of an enterprise’s activities using profit alone, therefore, when analyzing production, economic and financial activities enterprises use a whole system of indicators.
In a market economy, the individual level of profit of an enterprise in comparison with the industry one characterizes the degree of managers’ ability to successfully carry out business activities. At the same time, the amount of profit and its dynamics are also affected by factors independent of the efforts of the enterprise. Almost outside the sphere of influence of the enterprise are market conditions, the price level for consumed raw materials and fuel and energy resources, and depreciation rates.
Secondly, profit performs a social function, since it is one of the sources of budget formation different levels. Profits go to budgets in the form of taxes and, along with other revenues, are used to finance public needs, ensure that the state fulfills its functions, state investment, production, scientific, technical and social programs. This function of profit is also manifested in the fact that it serves as a source of external charitable activities of the enterprise, aimed at financing individual non-profit organizations, social institutions, and providing material assistance to certain categories of citizens.
Thirdly, profit performs a stimulating function. Its essence is manifested in the fact that profit is both a financial result and the main element of the financial resources of an enterprise. Indeed, profit is the main internal source formation of financial resources of the enterprise, ensuring its development. Therefore, the higher the level of profit of an enterprise in the process of its economic activities, the less the enterprise’s need to attract financial resources from external sources and the higher the level of self-financing of development, ensuring the implementation of the strategic goals of this development. In addition, unlike other internal sources of formation of an enterprise’s financial resources, profit is a constantly reproducible source and its reproduction in a successful business environment is carried out on an expanded basis.
In the economic literature, three profit functions are distinguished, which were discussed above. But one more function of profit can be identified - protective. Profit is the main protective mechanism that protects an enterprise from the threat of bankruptcy. At the same time, the likelihood of bankruptcy may arise even in conditions of profitable economic activity of the enterprise, but other things being equal, the enterprise is much more successful and quickly emerges from the crisis state with a high level of profit. An enterprise, by capitalizing the profits received, can quickly increase the share of highly liquid assets, increase the share equity with a corresponding reduction in the volume of borrowed funds used, as well as to form reserve financial funds.
In modern economic conditions, profit is the main source of increasing the market value of an enterprise. Conditions for self-increase in the value of capital are provided by capitalizing part of the profit received by the enterprise. At the same time, the higher the amount and level of capitalization of the profit received by the enterprise, the more to a greater extent the value of its net assets increases, and accordingly the market value of the enterprise as a whole, determined during its sale, merger, acquisition and in other cases.
- this is the monetary expression of the main part of cash savings created by enterprises of any form of ownership. It characterizes the financial result entrepreneurial activity enterprises. is an indicator that most fully reflects production efficiency, the volume and quality of products produced, the state of labor productivity, and cost. - one of the main financial indicators plan and assessment of economic activities of enterprises. Profits are used to finance activities for the scientific, technical and socio-economic development of enterprises and to increase the wage fund for their employees. It is not only a source of meeting the on-farm needs of the enterprise, but also acquires all higher value in the formation of budgetary resources, extra-budgetary and charitable funds.
In conditions of market relations, an enterprise must strive to obtain maximum profit, that is, to such a volume that would allow the enterprise not only to firmly maintain a sales position in the market for its products, but also to ensure the dynamic development of its production in a competitive environment.
Therefore, each enterprise, before starting production, determines what profit, what income it can receive. Hence, profit is the main goal of entrepreneurial activity, its final result.
The important task of every business entity is to get more profit at the lowest cost by complying with strict regime savings in spending funds and their most effective use.
The main source of cash savings for an enterprise is revenue from sales of products, namely that part of it that remains after deduction for the production and sale of these products.
Economic essence and functions of profit.
IN general view Profit refers to the difference between income and production costs.
At the enterprise level, in the conditions of commodity-money relations, net income takes the form of profit. In the goods market, enterprises act as relatively isolated commodity producers. Having set the price for the product, they sell it to the consumer, receiving cash proceeds, which does not mean making a profit. To identify the financial result, it is necessary to compare revenue with production and sales costs, which take the form of production costs. When revenue exceeds , the financial result indicates a profit. An entrepreneur always sets profit as his goal, but does not always receive it. If revenue is equal to cost, then it was only possible to reimburse the costs of production and sales of products. When selling without losses, there is no profit as a source of production, scientific, technical and social development. When costs exceed revenue, the company receives losses - a negative financial result, which puts the company in a rather difficult financial situation, which does not exclude bankruptcy.
Profit (loss) from the sale of products (works, services) is defined as the difference between the proceeds from the sale of products (works, services) without value added tax and excise taxes and production and sales costs included in the cost of products (works, services).
From the above definition it follows that its origin is associated with the receipt of gross income by an enterprise from the sale of its products (works, services) at prices determined on the basis of supply and demand. Gross income of an enterprise is revenue from sales of products (works, services) minus material costs– represents a form of net production of the enterprise, includes wages and profit. The connection between them is shown in Fig. 1.
This means that the more a company sells profitable products, the more profit it will receive, and the better its financial condition. Therefore, financial performance results should be studied in close connection with the use and sale of products.
Firstly, it characterizes the economic effect obtained as a result of the enterprise’s activities.
Secondly, profit has a stimulating function. Its content is that it is both a financial result and the main element of the financial resources of the enterprise. The actual provision of the principle of self-financing is determined by the profit received.
Thirdly, profit is one of the sources for the formation of budgets at different levels.
In practical terms, profit is a general indicator of the results of economic activity of enterprises of any form of ownership.
There are accounting and economic profits.
Economic profit is the difference between revenue and all production costs (external and internal).
In an accounting sense, profit is the difference between total revenue and external costs.
In accounting practice, the following profit indicators are distinguished and used in the process of analyzing business activities: balance sheet profit, profit from sales of products, works and services, profit from other sales, financial results from non-operating transactions, taxable profit, net profit.
Distribution and use of enterprise profits.
The distribution and use of profit is the most important economic process, ensuring that the needs of entrepreneurs are covered and the state generates revenue.
The profit distribution mechanism should be structured in such a way as to fully contribute to increasing production efficiency. The object of distribution is the balance sheet profit of the enterprise. Its distribution means the direction of profit to the budget and by items of use in the enterprise.
The principles of profit distribution can be formulated as follows:
- the profit received by the enterprise as a result of production, economic and financial activities is distributed between the state and the enterprise as an economic entity;
- profit for the state goes to the corresponding budgets in the form of taxes and fees, the rates of which cannot be arbitrarily changed. The composition and rates of taxes, the procedure for their calculation and contributions to the budget are established by law;
- the amount of profit of the enterprise remaining at its disposal after paying taxes should not reduce its interest in increasing production volumes and improving the results of production, economic and financial activities;
- the profit remaining at the disposal of the enterprise is primarily directed towards accumulation, which ensures its further development, and only the rest - for consumption.
In an enterprise, net profit is subject to distribution, that is, the profit remaining at the disposal of the enterprise after paying taxes and other mandatory payments. Sanctions are collected from it and paid to the budget and some extra-budgetary funds.
The profit remaining at the disposal of the enterprise is used by it independently and is directed to the further development of business activities. No authorities, including the state, have the right to interfere in the process of using the net profit of an enterprise. Along with financing production development, the profit remaining at the disposal of the enterprise is directed to satisfy consumer and social needs. Thus, from this profit one-time incentives and benefits are paid to those retiring, as well as pension supplements, and payment expenses are incurred additional holidays beyond the duration established by law, expenses for free food or meals at reduced prices.
Profit is used in cases of violation by the enterprise of current legislation to pay various fines and sanctions.
In cases of concealment of profits from taxation or contributions to extra-budgetary funds, penalties are also collected, the source of payment of which is net profit.
Distribution of net profit is one of the directions intra-company planning. In accordance with the charter, enterprises can draw up cost estimates.
Distribution of profits for social needs includes expenses for the operation of social facilities on the balance sheet of the enterprise, cultural events, etc.
All profit remaining at the disposal of the enterprise is divided into two parts. The first increases the property of the enterprise and participates in the accumulation process. The second characterizes the share of profits used for consumption. Retained earnings in the broad sense as profits used for accumulation and retained earnings from previous years indicate the financial stability of the enterprise and the presence of a source for subsequent development.
Formation and use of profit.
Economic analysis is the most important stage of work preceding the planning and forecasting of enterprise resources and their effective use. Analysis of the formation and use of profit is carried out in several stages:
- analyzes profit by composition over time;
- held factor analysis profit from sales;
- the reasons for deviations in such profit components as interest receivable and payable, other operating income, non-operating income and expenses are analyzed;
- the formation of net profit for accumulation and consumption is analyzed;
- given to the efficiency of profit distribution for accumulation and consumption;
- the use of profit for accumulation and consumption is analyzed;
- Proposals for drawing up a financial plan are being developed.
Analysis of the profit composition allows us to develop the necessary behavior strategy aimed at minimizing losses and financial risk from investments in this enterprise.
The main sources of information when analyzing financial results and profits are financial reporting data f. 2 “Profit and Loss Statement”.
Enterprises have the right to use the profits received at their own discretion, except for the part that is subject to mandatory deductions, taxation and other areas in accordance with the law.
The profit remaining at the disposal of the enterprise is used by it independently and is directed to the further development of the enterprise's activities. No bodies, including the state, have the right to interfere in the process of using, satisfying material and social needs labor collectives.
The profit distribution mechanism should be structured in such a way as to fully contribute to increasing production efficiency.
Considering profit as an economic category, we talk about it in the abstract. But when planning and assessing the production and economic activities of an enterprise, and distributing the profit remaining at the disposal of the enterprise, specific types of profit are used.
Fig.1. Mechanism for generating profit indicators
The profit generation mechanism is contained in the “Profit and Loss Statement”.
Profit of the reporting period(balance sheet, gross) profit (Pb) - the total, total profit of an enterprise received over a certain period from all types of production and non-production activities of the enterprise recorded in its balance sheet. It includes:
Pb = Pr+Pp.r±Pv(Uv),
where Pr – profit from sales of products, monetary units;
Pp.r. – profit from operating income and expenses, monetary units;
Pv (Uv) – profit (loss) from non-operating activities, monetary units.
Profit from product sales is the main component of gross profit, since it reflects the result of regularly carried out activities for the production and sale of products (services):
Pr = VR - S P – VAT – A - Nv
where VR is revenue from product sales, den. units;
VAT - value added tax, den. units; A - excise taxes; Sp - total cost of production, den. units; Нв - taxes paid on proceeds from sales of products, den. units
Profit from operating income and expenses includes profit (losses) from subsidiary agricultural farms, motor vehicles, profit from the sale of fixed assets and other types of property.
Part income from non-operating operations includes income received by the enterprise from operations not directly related to the production of products (works, services), including gratuitously received funds and other valuables (including fixed assets, inventory, intangible assets, securities), except transfer of these values within one owner. In addition, this includes income from equity participation in the activities of other organizations, income from leasing property, dividends, interest on shares, bonds and other securities owned by the enterprise, the amount of economic sanctions received and paid (fines, penalties, penalties, etc. .).
Taxable (estimated) profit (Tno) is an estimated indicator determined for the purposes of paying income tax. According to existing legislation, taxable profit is determined as follows:
Pno = Pb – Pnd – Pln – Nned,
where Pnd is profit subject to income tax, den. units;
Pln - profit subject to preferential taxation, den. units;
Nned - real estate tax, den. units
Income tax is imposed on dividends received on securities and income equivalent to them.
In order to indirectly influence the economy, economic and social processes, and stimulate production, the state establishes tax breaks on profits allocated to certain types of activities. For example, the following are not subject to income tax:
profit actually used for measures to eliminate the consequences of the disaster at the Chernobyl nuclear power plant in accordance with the republican program;
profit of production workshops, pilot plants, subsidiary farms and other organizations of educational institutions received from practical training of students and students;
profit aimed at financing capital investments for industrial purposes and housing construction, as well as repaying bank loans received and used for these purposes;
profit directed to the maintenance of children's health institutions, public education institutions, homes for the elderly and disabled, housing facilities, healthcare, preschool institutions, cultural and sports institutions on their balance sheet, as well as costs for these purposes with the share participation of enterprises in the maintenance of these objects and institutions - in accordance with the cost standards for similar institutions maintained at the expense of the budget, and some other expenses determined by the relevant legislation.
Net profit- this is that part of the profit that remains at the disposal of the enterprise after paying taxes, deductions, and mandatory payments established by law.
Accounting profit- profit calculated from accounting documents without taking into account the documented costs of the entrepreneur himself, including lost profits. Economic profit is the difference between income and economic costs, which include, along with general costs, alternative (time) costs. Typically, economic profit is less than accounting profit by the amount of the entrepreneur's uncompensated own costs.
There are three most common approaches to profit distribution.
The first is the complete withdrawal of net profit for consumption. The owner withdraws all net profit in the form of dividends on capital. In this case, the enterprise has no source of financing for expanded reproduction.
The second is equal distribution of net profit between consumption and accumulation. Net profit is divided into two parts - accumulation (profit capitalization) and dividends (consumption fund). This is the best option financial strategy. On the one hand, without accumulation there will be no development of the enterprise, and therefore, it will face a decrease in the competitiveness of products and a loss of sales markets. On the other hand, without dividends above the bank's discount rate, one can hardly count on an influx of new investments in the form of another issue of shares or borrowings.
The third is the predominance of consumption over accumulation. A significant part of the net profit goes to the consumption fund for the payment of bonuses and remuneration to staff in accordance with the collective agreement, part of the funds goes to accumulation (purchase of fixed assets and increase in working capital), the minimum amount goes to the payment of dividends to the owners. This approach leads to enterprise stagnation and reduced investment. Low return on equity does not attract investors. Often this situation arises in state-owned enterprises or in joint-stock companies with a controlling stake in the state.
As a rule, planning for the distribution of net profit at an enterprise is carried out in accordance with the current charter or collective agreement. Below we present the most common option in economic practice for distributing profits across areas of the enterprise’s economic activity.
Fig.2. Distribution of net profit of a joint stock company
The net profit remaining at the disposal of the enterprise is distributed:
For an insurance stock or reserve fund formed in case of unforeseen circumstances;
to the production development fund, which includes a depreciation fund and part of the net profit (advancement of measures to expand, reconstruct and improve production, purchase of new equipment, introduction of advanced technology);
to the fund for the social development of production (construction and repair of buildings and structures on the balance sheet of the enterprise, children's institutions, clinics, cultural, educational and medical facilities, etc.);
consumption fund: (material incentives for enterprise employees, payment of dividends to shareholders, etc.).
Providing production, material and social needs at the expense of net profit, an enterprise must strive to establish an optimal balance between the accumulation and consumption fund in order to take into account market conditions, the interests of shareholders, and at the same time stimulate and encourage the results of the labor of its employees.
