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How to calculate the profitability of

How to calculate the profitability of

One of the key indicators of the success of the company is the profitability of its operations.

Under this concept implies a relative indicator of economic efficiency. Complex it reflects the degree of efficiency of the use of money, manpower and material resources.

profitability ratio is calculated as the ratio of income to assets and resources, which it is formed.

You will need

  • -sootnosheniya income and expenses.



The profitability of production activitiesdetermined by the ratio of profit from sales minus depreciation and cost reporting period for the sale of products, and also shows how much the company make a profit from each spent on the production and sale of products of the ruble.


It can be calculated as a whole on the enterprise,and in some segments of its products. Profitability of products more accurately reflect the results of the company's activity, as it takes into account not only the bottom line but also the entire volume of earnings, which went out of circulation.


The equation for calculating the profitability of productionIt is as follows: Profit figures are divided into sales and multiplied by 100. So you get it level. Performance is determined as a percentage.


For a better understanding of the level of profitability it is necessary to study in detail the reasons for price changes, the unit cost of production and their impact on the very profitability. Such calculations are made to carry out for each product.


Since the financial performanceEnterprise is the difference between the amounts of his income and expenditure, thus to determine it is necessary to relate the income and expenses for a particular reporting period. But as income and expenses may relate to different periods, it makes sense to divide their time component. This is ensured by the right of capitalization.


In this case, the financial result is reducedor increased costs to those who belong to this period. That is, the costs of the company expensed in the period in which they bring to the company's revenue. If they bring the loss becomes apparent notprofitability enterprise. All of these costs and revenues are shown in the balance sheet.

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