Enterprise - profit - profitability

The organization of business in a market economy is aimed at making a profit, which is the main indicator responsible for the efficiency of the enterprise. In fact, we are talking about profitability, which is the ratio between profit and expenditure per unit of output. Profitability can be calculated for various areas of business, for example, the profitability of staff, which indicates the efficiency of the employee in relation to the resources spent on him in the form of overalls, social package, workplace organization and other.

Profitability and profitability are interrelated, since the second can serve as a means to enhance the first, and point to the problems of the company. In addition, profit makes it possible to conduct various incentive measures, develop business, etc.

The profitability in retail trade, its total 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 received exclusively from the sale of goods, without taking into account other costs, that is, it is a question of the level of profitability of sales. European economists use the annual ratio of profit for a more accurate estimate.

In the world practice, profitability is a whole system of indicators that allow describing the financial and economic performance of an enterprise. In this system, the numerator will be balance and net profit, or profit from the sale of goods.

Profitability and profitability play an important role in the analysis of profitability of sales, where the assessment of profitability for specific goods or a number of goods. This is necessary to more accurately ascertain the performance of a particular area of the enterprise and determine profitability on such grounds. In the course of the analysis, goods that have a low, high and unprofitable competitiveness of each of the goods are identified, which as a result allows taking measures to increase profitability and increase the production of highly competitive goods.

The effectiveness of the business can not be determined by what the profitability of the transaction was, according to its idea or degree of profitability. For these purposes, use such an indicator as the level of profitability. In this case, profitability is a combination of two concepts:
- profitability as a qualitatively quantitative indicator,
- profitability - economic category.

The level of profitability is important not only for management, but also for employees. For them, this is an indicator of stability and confidence in the future. That is why it is advisable to pay additional premiums and awards for employees of the enterprise. This, in turn, stimulates positive motivation for further work.

Equally important is the indicator for management, especially the joint-stock company. In this case, it is the profitability of the transaction (that is, the money contributed to the development of the enterprise from one owner) for each shareholder or owner, since for them the coefficient is the guarantor of the correctness of the investment of financial assets. The profitability of the transaction implies not only the receipt of good dividends, which is beneficial for owners, but also for management, which wants to agree on the introduction of new financial costs for the purchase of equipment, the creation of new jobs and so on.

One of the most important areas of the enterprise is the determination of the profitability of the personnel. According to statistical calculations, only 20% of employees bring the main profit, all the other participants in the process, although they perform their functions, but are less important. It is from this peripheral link that you need to get rid of in a crisis. In general, the profitability of staff should include an assessment of the performance of the employee in relation to the costs of its maintenance.

Summarizing, it can be said with certainty that profitability is an extremely important indicator responsible for the effectiveness of individual business elements.