Enterprise - profit - profitability

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2019-05-25 17:00:22

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Business Organization in the conditions of market economy aimed at obtaining profit, which is the main figure responsible for the performance of the company. In fact, we are talking about profitability, which is a ratio between profit and invested by the cost per unit of output. Profitability can be calculated for different areas of the business, for example, the profitability of the staff which indicates the performance of the employee in relation to the resources expended on it in the form of workwear, SOC.pack, workplace organization and other things.

Profitability and efficiency are interrelated, since the second can serve as a means to increase the first and to point out the problems of the company. Moreover, profit provides the opportunity to carry out various promotional activities, develop business, etc.

Profitability in the retail environment, its overall value is determined by the ratio of the amount of profit to turnover for a certain period of time. But in this case the profit derived solely from the sale of goods, without taking into account other expenses, we are talking about the level of profitability of sales. European economists for more accurate estimates use annual profit.

In the world practice profitability – a whole system of indicators that characterize financial and economic work of the enterprise. In this system the numerator is the balance and net profit, or profit from the sale of goods.

The profitability and efficiency play an important role in the analysis of sales profitability, assess profitability on specific products or range of products. It is necessary to more accurately determine the performance of individual companies and the determining the profitability on such grounds. The analysis revealed a product having low, high, and losing the competitiveness of each product, allowing the result to take steps to improve profitability and increase production of competitive goods.

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The Efficiency of business cannot be determined then, what was the profitability of the deal on her idea or the degree of profitability. For these purposes, use such indicator as profitability. In this case, profitability is a combination of two concepts:
- profitability quality-Kolichestvennyi indicator
- profitability-economic category.

The value of the level of profitability is important not only for management but also for employees. For them it is an indicator of stability and confidence in the future. It is therefore advisable to carry out the payment of additional premiums and awards to employees. This, in turn, stimulates positive motivation for further work.

No less important index for management, especially joint. In this case, the profitability of the transaction (that is, money made on the development of enterprises from one owner) for each shareholder or owner, because for them the ratio is the guarantor of the proper investment of financial resources. The profitability of the deal means not only the dividends that profitable for owners, but for management, which seeks to coordinate the introduction of new financial costs for the purchase of equipment, creation of new jobs, and more.

One of the very important areas of work of the enterprise is profitability, staff. According to statistical estimates, only 20% of workers bring a basic income, all the other participants in the process, though, and perform their functions, but are less important. It is from this peripheral level need to get rid of in a crisis. In the General case, the margin of staff should include an evaluation of the effectiveness of the employee in relation to the cost of its contents.

To summarize, it is safe to say that the profitability – a crucial figure responsible for the efficiency of separate elements of the business.


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Alin Trodden - author of the article, editor
"Hi, I'm Alin Trodden. I write texts, read books, and look for impressions. And I'm not bad at telling you about it. I am always happy to participate in interesting projects."

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