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# How to calculate profitability

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During the assessment of the effectiveness of the economic activity of the organization, specialists use the calculation of profitability indicators, which are also known under another name - profitability ratios.

To determine the overall efficiency of the organization, you need to know the value of this indicator.

Instructions

1

Identify profitability Organizations can, using such formalThe company's documents, such as the "Balance Sheet" and the "Profit and Loss Statement". The indicator of profitability of the enterprise shows, how much effectively in its activity all property actives of the company, namely turnaround and fixed assets are used. A more precise sense of the profitability ratio is in calculating the amount of profit the organization receives when investing one ruble in its production assets. To determine the level of profitability of the company it is necessary to use the formula: РП = БП / (VOSR + Osr.), Where РП - size of profitability of the enterprise-
BP - the accounting (balance) profit of the organization, received in the reporting period-
The average value of the value of current assets, calculated for the reporting period,
VOSr. - The average value of the value of non-current assets calculated for the reporting period.

2

Accounting (balance) profit organization -This is the profit that was received by the company based on the results of the reporting period, and is the basis for calculating the profit tax. In other words, it is the profit of the organization before taxation. To find out the value of this indicator, it is necessary to remove from the amount of revenue received from the sale of services and goods: - managerial and commercial costs-
- the cost price of the provided services or sold goods-
- balance from non-operating activities-
- balance from operating activities.

3

To calculate the average value of productionFunds of the organization it is necessary to find out their book value at the beginning and end of the analyzed period. Then, using the formula to determine a simple average value, calculate the average value of the organization's assets in the reporting period.