Enterprise profitability management. Approaches to managing the profitability of an industrial enterprise's products

8.2. Profitability management

equity capital

To develop a strategy for managing the return on equity and a comprehensive assessment of the main factors influencing it, the DuPont model 1 is used. This model provides an assessment of the impact on profitability equity capital factors such as equity multiplier, business activity and profitability of sales.

The DuPont model aggregates the most important absolute and relative financial indicators of an organization's performance (Figure 8.1).

The strategy for increasing profitability due to the three listed factors largely depends on the specifics of the organization's activities. Therefore, in the process of developing financial policy, it is necessary to assess the internal and external factors of the functioning of the business. At the expense of margin, an organization that produces high-quality products for a segment characterized by a fairly high

1 The DuPont model of financial analysis was first formulated in the 1910s, when a well-known chemical company acquired a stake in General Motors Corp and set out to clean up the messy finances of an automobile firm. According to former GM Alfred Sloan, GM's continued success was only possible thanks to the planning and management system developed by DuPont. This overwhelming success brought the DuPont model to prominence in all major US corporations. Until the 1970s, this was the dominant financial analysis model.

8. Risk and performance management of the organization 369

Rice. 8.1. DuPont model

DuPont's three-factor model is:

370 III. Long-term financial policy

accounts payable, the liabilities are equal to the invested

capital) to equity; To 0 - asset turnover ratio; T - net profitability of sales (net margin).

There are modifications of the DuPont model, allowing a more complete study of the influence of individual factors on the return on equity. For example, a five-factor model that additionally takes into account the factor of the interest burden and the efficiency of other activities. The indicator "interest burden" is calculated as the ratio of net profit to net operating profit and allows you to assess the effectiveness of borrowing; the indicator "efficiency of other activities" is defined as the ratio of net operating profit to net profit from sales and allows you to assess the impact of the result from other operations on the overall performance of the business.

The five-factor model is:.

Where NS CHO - net operating income;

P NPR - net profit from sales, calculated as profit

from sales net of income tax; T CHO - net operating margin;

b PR - percentage burden, calculated as the ratio of net

profit to net operating profit;

To NS - coefficient of efficiency of other activities. If

To NS < 1, then other activities are unprofitable and reduce the overall business efficiency.

DuPont's five-factor model allows for a comprehensive assessment of the organization's activities, including an assessment of the financing strategy (through the equity capital multiplier and the percentage burden indicator), management efficiency (through asset turnover and the efficiency ratio of other activities), product competitiveness (through margin).

Analysis of the situation. The results of calculating the return on equity of JSC "XYZ" according to the three-factor model of DuPont are presented in table. 8.7.

Evaluating the results of the analysis, it can be argued that the decrease in the return on equity from 38.21 to 37.24% was predetermined by two factors:

8. Risk and performance management of the organization 371

of 8.28 percentage points), as well as the net margin (6.06 points), only the multiplier (13.37 points) had a positive effect on the return on equity. As a result, there was a partial compensation for the decrease in operating efficiency by an increase in financial activity. Thus, the methodology captures the following trends that took place in the analyzed period - a decrease in operating efficiency, manifested in a decrease in margin from 14.46 to 12.31% and a decrease in asset turnover from 2.47 to 1.99, as well as an increase in financial activity , which manifested itself in an increase in the multiplier from 1.07 to 1.52.

Table 8.7. capital according to the DuPont model

At the next stage of the calculations, a five-factor model is investigated, obtained by expanding the DuPont model and introducing two more factors into it - the indicator of the percentage burden and the indicator of the effectiveness of other activities. The calculation results are presented in table. 8.8.

The calculation results make it possible to significantly concretize the previously drawn conclusions. The decrease in net margin, which was noted earlier, is not associated with a decrease in the efficiency of core activities, but with the inefficiency of other operations, whose contribution to the decline in profitability amounted to 5.55 points. If the efficiency of other operations had not decreased from 0.95 to 0.82, the return on equity would have been 42.82%.

Borrowing efficiency was strong, as the increase in the interest burden, which led to a decrease in profitability by 0.48 points, was many times offset by an increase in the multiplier, which resulted in a 13.37 percentage point increase in profitability.

372 III. Long-term financial policy

Table 8.8. The results of the analysis of the profitability of owncapital according to the five-factor model

The main directions of influence on the return on equity capital should be: further attraction of borrowed capital and an increase in the equity capital multiplier, an increase in asset turnover by strengthening control over the use of newly acquired property, increasing margins by strengthening the marketing mix and increasing the efficiency of the cost policy. , increasing the efficiency of other activities by reducing losses from other operations. -

It is well known that the results of the activities of enterprises can be assessed by various indicators, such as the volume of production, the volume of sales, and profit. Describing the financial or production result, the listed indicators are not able to assess the efficiency of enterprises. This is due to the fact that these indicators are absolute characteristics of the enterprise, and their correct interpretation in assessing the effectiveness can be carried out in conjunction with other indicators characterizing the funds invested in the enterprise. The indicators characterizing the efficiency of enterprises are indicators of profitability (or profitability). The analysis of profitability allows you to assess the ability of the company to generate income for the capital invested in the company. There are several concepts of profitability in the economic literature. Profitability (from German rentabel - profitable, profitable) is an indicator of the economic efficiency of production at enterprises, which comprehensively reflects the use of material, labor and monetary resources. According to other authors, profitability is an indicator that is the ratio of profit to the amount of production costs, money investments in the organization of commercial operations or the amount of the company's property used to organize its activities. Either way, profitability is the ratio of income and capital invested in creating that income. By linking return to capital invested, profitability allows you to compare the level of return of an enterprise with the alternative use of capital or the return obtained by the enterprise under similar risk conditions. Risky investments require higher returns in order for them to be profitable. Since capital is always profitable, to measure the rate of return, profit as a reward for risk is compared with the amount of capital that was required to generate that profit. Profitability is an indicator that comprehensively characterizes the efficiency of an enterprise. With its help, it is possible to assess the efficiency of enterprise management, since obtaining high profits and a sufficient level of profitability largely depends on the correctness and rationality of the management decisions... The value of the level of profitability can be used to assess the long-term well-being of the enterprise, i.e. the ability of the enterprise to generate sufficient return on investment. For long-term lenders and investors investing money in the company's equity capital, this indicator is a more reliable indicator than indicators of financial stability and liquidity, which are determined on the basis of the ratio of individual balance sheet items. By establishing the relationship between the amount of profit and the amount of invested capital, the profitability indicator can be used in the process of forecasting profit. In the forecasting process, the actual and expected investments are compared with the profit that is expected to be obtained on these investments. The estimate of the estimated profit is based on the level of profitability for the previous periods, taking into account the projected changes. In addition, profitability is of great importance for decision-making in the field of investment, planning, in the preparation of estimates, coordination, assessment and control of the activities of the enterprise and its results. Thus, we can conclude that profitability indicators characterize the financial results and efficiency of the enterprise. They measure the profitability of an enterprise from various positions and are systematized in accordance with the interests of the participants in the economic process. In the economic literature, various authors classify profitability indicators differently. In the Russian understanding of profitability, we mean the profitability of products, production, or profitability of sales. In foreign practice, all profitability indicators are indirect (relative) and in the calculations, as a rule, there is a VP or PE. According to the definition of domestic authors, profitability indicators are indicators of the generalized characteristics of the efficiency of the enterprise as a whole, showing how profitable the organization's activities are. The majority of enterprises use the indicator of profitability of products sold to assess the effectiveness of their activities. Product profitability = Profit from product sales / Cost of products sold Return on equity (Du Pont formula): Rsk = CP / BP × BP / A × A / CK, where (1) Rsk is the return on equity; PE - net profit; A - the sum of the assets of the organization; ВР - production volume (sales proceeds); SK is the organization's own capital. Return on assets = Net income / Average cost of assets Return on non-current assets = Net income / Average cost of non-current assets Return on current assets = Net income / Average cost of current assets Return on equity = Net income / Average cost of equity capital Return on sales = Profit from sales / Revenue Total profitability - the ratio of the balance sheet profit to the average annual cost of the main and working capital... It is determined by the formula: Ro = Pb / F * 100%, (2) where Ro is the total profitability, Pb is the total amount of balance sheet profit, F is the average annual cost of fixed assets, intangible assets and tangible working capital.

Manufacturing profitability management is strategic. A modern tool for managing the development of an organization in the face of growing changes in the external environment and the associated uncertainty is the methodology of strategic management.

Practice shows that those organizations that carry out complex strategic planning and management, operate more successfully and generate profits well above the industry average. In other words: the one who plans his strategy better, the faster he achieves success.

Methods for managing the profitability of production result from a set of indicators that affect its change. If profit is expressed in absolute amount, then profitability is a relative indicator. The profitability indicator is a relative characteristic of the financial results and efficiency of the enterprise, that is, it characterizes the relative profitability of this enterprise. The performance of an enterprise can be measured by indicators such as sales, costs and profits. Describing the financial or production result, the listed indicators are not able to assess the efficiency of the enterprise. First of all, this is due to the fact that these indicators are absolute characteristics of the enterprise's activities, and their correct interpretation in assessing performance can be carried out in conjunction with other indicators characterizing the funds invested in the enterprise. The indicators characterizing the efficiency of the enterprise are indicators of profitability (profitability). Thus, for the competent management of the profitability of production, it is necessary to manage the indicators affecting its change. Characterizing the stages of profitability management, it should be noted that, first of all, it is necessary to carry out a component analysis of this indicator. It will allow you to consider the entire group of indicators affecting profitability, and take measures to optimize them in order to increase profitability. The components of profitability are shown in Figure 1.1.

Figure 1.1 Components of profitability

It is important to pay attention to each of these components because any of them can affect profitability. It is very important for a manufacturer to choose the most profitable sales channel to increase revenue. Moreover, the benefit should not consist in an increase in the volume of products sold, but in an increase in its cost, and a decrease in storage and transportation costs.

The range of products is also of great importance in the formation of the profitability indicator, since it is he who determines the place of the commodity producer in the agricultural market. It is very important to produce the types of products for which the demand is highest in order to obtain the greatest benefit.

Also, great attention should be paid to such interrelated indicators as technique and technology, because they play a very important role in this chain of dependency. The enterprise should monitor the technology and constantly improve it, while it is important to keep track of the updating of technology and equipment. It makes no sense to develop technology in the presence of outdated technology. Thus, by observing these measures, there is the possibility of reducing production costs.

Undoubtedly, the main indicators affecting profitability are profit and capital directly invested in production.

Either way, profitability is the ratio of income and capital invested in creating that income. By linking return to capital invested, profitability allows you to compare the level of return of an enterprise with the alternative use of capital or the return obtained by the enterprise under similar risk conditions. Risky investments require higher returns in order for them to be profitable. Since capital is always profitable, to measure the rate of return, profit as a reward for risk is compared with the amount of capital that was required to generate that profit. Profitability is an indicator that comprehensively characterizes the efficiency of an enterprise. By establishing the relationship between the amount of profit and the amount of invested capital, the profitability indicator can be used in the process of forecasting profit and thereby control it.

Profitability characterizes the performance of an organization. Profitability indicators make it possible to assess what profit a company has from each ruble of funds invested in its assets.

Thus, profitability is of great importance for decision-making in the field of investment, planning, in the preparation of estimates, coordination, assessment and control of the enterprise and its results. And the management of this indicator in the production process is simply necessary.

Profitability indicators characterize the financial results and efficiency of the enterprise. They measure the profitability of an enterprise from various positions and are systematized in accordance with the interests of the participants in the economic process. Thus, we can conclude that profitability indicators characterize the financial results and efficiency of the enterprise. They measure the profitability of an enterprise from various positions and are systematized in accordance with the interests of the participants in the economic process. As we found out, the profitability of economic activity reflects the rate of compensation (remuneration) for the entire set of sources that are used by the enterprise to carry out its activities. You also need to pay great attention to the development strategy of the enterprise, since agricultural production is a seasonal industry and it is important to make timely decisions about changing a particular indicator. Subject to all the above steps and methods, the manager will be able to easily create optimal conditions in production to achieve greater efficiency.

And for the most correct and accurate management of profitability, it is necessary to optimize all indicators, even if they do not directly affect it.

Profit and Profit Management 19

CHAPTER 2. ANALYSIS OF PROFITS AND PROFITABILITY ON THE EXAMPLE OF SEC "ERMAK" 27

2.1. Organizational and production characteristics of the enterprise 27

2.2. Grade financial condition SEC "Ermak" 32

2.3. Analysis of the return on equity of the SEC "Ermak", profitability

products 35

2.4. Analysis of the financial results of the activity of SEC "Ermak 37

CHAPTER 3. DEVELOPMENT OF MEASURES TO INCREASE PROFITS IN SEC "ERMAK" 49

3.1. Yield increase measure 49

3.2. New Services Event 55

3.3. Savings measure wages by improving the qualifications of employees 56

CONCLUSION 60

BIBLIOGRAPHY 64

ANNEXES 67

Introduction

The main task of the enterprise in a market economy is to fully satisfy the needs of the national economy and citizens in its products, works and services with high consumer properties and quality at minimal costs, increasing the contribution to accelerating the socio-economic development of the country. To accomplish its main task, the company provides an increase in profits.

Profit is the primary incentive for the creation of new or the development of existing enterprises. The opportunity for profit motivates people to look for more efficient ways to combine resources, invent new products that may be in demand, and apply organizational and technical innovations that promise to increase production efficiency. Working profitably, each enterprise contributes to the economic development of society, contributes to the creation and augmentation of social wealth and the growth of the well-being of the people.

Profitability is paramount economic indicator characterizing economic activity enterprises. Increasing the role of indicators such as profit, profitability, for the analysis of the activities of enterprises is of great importance. It serves as a calculating basis for prices, and therefore profits.

The increase in the profitability of products is a significant source of increasing on-farm savings.

Suffice it to say that an increase in the profitability of agricultural products by 1% will save about 700 million rubles. The search and mobilization of the available reserves for its reduction are impossible without a comprehensive cost analysis.

Without analyzing the level of profitability of products, it is impossible to correctly solve the issues of the structure of agricultural production, its specialization, location on the territory of the country, to determine the efficiency of production of one or another agricultural product. Based on the level of profitability of products, the state sets the level of purchase prices for agricultural products.

That is why the analysis of the profitability of products in an agricultural enterprise is of great interest and is of great importance for improving the efficiency of agricultural production.

The topic of profit and profit management is especially acute for Russian enterprises, since the protracted economic crisis, which includes high taxes and non-payments, significantly devalues ​​the profits received. In addition, having found themselves from the beginning of the reforms in the conditions of “free economic floating”, enterprises can no longer rely on state support, they are increasingly operating in conditions of self-sufficiency and self-financing.

Various sources of information are widely used to analyze the profitability of agricultural products: planning, regulatory, reporting, control and revision, production and technological, etc., which are taken mainly from production and financial plans of farms.

Relevance thesis is determined primarily by the objectively significant role of studying the formation of the profitability of the main production in the agro-industrial complex in a modern socially oriented market economy, the transition to which is the main vector of the radical reform unfolding in Russia. That is why the analysis of the profitability of the main production is a strategic task of the economic reform policy.

Agricultural enterprises that have switched to new working conditions independently plan the amount of the annual increase in the profitability of products in rubles and as a percentage of the cost price being compared marketable products, as well as in kopecks per ruble of all marketable products. This, however, does not mean that the profitability indicator has lost its previous value. A systematic increase in the profitability of production is a matter of concern for the entire collective of an agricultural enterprise, since this leads to an increase in profits and the corresponding sources of further development of the enterprise and an increase in the well-being of the collective.

Target thesis - a study of methods for managing the profit and profitability of an enterprise and the development of measures to increase profits.

Subject of study- profit and profitability of the organization, the essence, value and ways of increasing.

Research object is the SEC "Ermak" of the Novovarshavsky district of the Omsk region. To achieve this goal, it is necessary to solve the following tasks:

Study profit as economic category, identify the essence, functions and types of profit;

· To determine the main indicators of profit and profitability, their role and importance in assessing the effectiveness of the enterprise;

· To identify the main economic factors affecting the indicators of profit and profitability in the SPK "Ermak"

· Develop measures to increase profits.

The work used the methods economic analysis- horizontal and vertical analysis, coefficient analysis and others.

Structurally, the work consists of an introduction, III chapters and a conclusion.

Chapter I of the work examines the theoretical aspects of the organization of profit and profitability management.

Chapter II contains a description of the SEC "Ermak", and it analyzes the financial condition of the organization, analyzes the financial results of activities, and analyzes the profitability.

Chapter III is devoted to the development of measures to increase profits and profitability. In the conclusion, the main conclusions of the study are formed.

CHAPTER 1. THEORETICAL BASIS OF THE ORGANIZATION OF PROFIT AND PROFITABILITY MANAGEMENT

1.1. Profit and profitability and their economic essence

Indicators of financial results characterize the absolute efficiency of the enterprise. The most important of them are the indicators of profit, which in a market economy forms the basis of the economic development of the enterprise.

Profit is the monetary expression of the main part of monetary savings created by enterprises of any form of ownership.

First, profit characterizes the final financial result. entrepreneurial activity enterprises. It is the indicator that most fully reflects the efficiency of production, the volume and quality of products produced, the state of labor productivity, the level of cost. Profit indicators are the most important for evaluating production and financial activities enterprises. They characterize the degree of his business activity and financial well-being. According to the profit, the level of return on the advanced funds and the profitability of investments in the assets of the enterprise are determined. Profit also has a stimulating effect on strengthening commercial accounting and intensifying production.

Secondly, profit has a stimulating function. Its content is that profit is both a financial result and a main element. financial resources enterprises. The real provision of the principle of self-financing is determined by the profit received. The share of net profit remaining at the disposal of the enterprise after paying taxes and other mandatory payments should be sufficient to finance the expansion of production activities, scientific, technical and social development of the enterprise, material incentives for employees.

The growth of profit determines the growth of the potential of the enterprise, increases the degree of its business activity, creates a financial base for self-financing, expanded reproduction, solving problems of social and material needs labor collectives... It allows you to capital investment into production (thereby expanding and updating it), introduce innovations, solve social problems at the enterprise, to finance measures for its scientific and technological development. In addition, profit is an important factor in a potential investor's assessment of the company's capabilities; it serves as an indicator of the efficient use of resources, i.e. is necessary to assess the performance of the firm and its capabilities in the future.

Thirdly, profit is one of the sources of budgeting at different levels. It enters the budgets in the form of taxes and, along with other income receipts, is used to finance and meet joint social needs, ensure the state's performance of its functions, state investment, social and other programs, takes part in the formation of budgetary and charitable foundations... At the expense of profit, part of the company's obligations to the budget, banks, other enterprises and organizations is also fulfilled.

financial revenue sale profitability

Introduction

Conclusion

List of used literature

Introduction

In these conditions, an important factor in the further development of any enterprise is the excess of cash receipts in comparison with payments. The presence or absence of income will ultimately depend on the ability of the firm to function, its competitiveness and financial condition.

In turn, the most important factors in income growth are an increase in the volume of production and sales of products, the introduction of scientific and technical developments, and, consequently, an increase in labor productivity, a decrease in costs, and an improvement in product quality. In the context of the development of entrepreneurial activity, objective prerequisites for the real implementation of these factors are created.

Late receipt of proceeds entails interruptions in activities, reduced profits, violation of contractual obligations, and penalties.

The purpose of this work is to improve the financial condition of the enterprise under consideration (for example, ZAO Wild Orchid). To achieve this goal, the following tasks were set:

Assessment of the financial and economic activities of the enterprise;

Identification of problems related to the formation and management of proceeds from sales;

Consideration of modern methods of management of proceeds from sales;

The subject of the research is methodological formalized approaches to the system of formation and management of proceeds from sales and profitability of sales of CJSC "Wild Orchid".

The object of this work is the financial and economic activities of the enterprise.

Chapter 1. Theoretical basis management of sales proceeds and profitability of sales

1.1 The concept of the revenue of a trading enterprise and the factors that determine it

The socio-economic development of Russia during the development of market relations is accompanied by qualitative structural shifts towards the intensification of production.

In these conditions, an important factor in the further development of any enterprise is the excess of cash receipts in comparison with payments. The presence or absence of income will ultimately depend on the ability of the firm to function, its competitiveness and financial condition.

In turn, the most important factors in income growth are an increase in the volume of production and sales of products, the introduction of scientific and technical developments, and, consequently, an increase in labor productivity, a decrease in costs, and an improvement in product quality. In the context of the development of entrepreneurial activity, objective prerequisites for the real implementation of these factors are created.

The main source of the firm's income is the proceeds from the sale of products, namely that part of it that remains after deducting material, labor and monetary costs for the production and sale of products. Therefore, an important task for each business entity is to get more profit at the lowest cost by observing a strict regime of savings in spending and using them most efficiently.

The proceeds from the sale of products are calculated in current prices. In the context of a radical change in the management of the economy, the volume of proceeds from the sale of products is becoming one of the most important indicators of economic entities. This indicator creates the interest of labor collectives not so much in the growth of the quantitative volume of products as in the increase in the volume of products sold (taking into account the decrease in the balances of unsold products).

This means that such products and goods should be produced that meet the requirements of consumers and are in great demand. And for this it is necessary to study the market conditions of management and the possibility of introducing manufactured products to the market by expanding the volume of their sales. With the development of entrepreneurship and increased competition, the responsibility of enterprises for fulfilling their obligations increases. Thus, the indicator of proceeds from the sale of products meets the requirements of commercial calculation and, in turn, contributes to the development of entrepreneurial activity.

The interest of enterprises in the production and sale of high-quality products that are in demand on the market is reflected in the amount of profit, which, other things being equal, is in direct proportion to the volume of sales of these products.

The proceeds from the sale of products at appropriate prices depend on the market conditions of management, the presence or absence of contracts, ways of introducing goods to the market, etc.

The sales proceeds include all receipts for goods (work, services) sold, as well as other property (including securities), property rights in cash or in kind.

The definition of revenue from sales depends on whether revenue is recognized on an accrual basis or on a cash basis.

With the accrual method, proceeds from sales are calculated as the products (works, services) are shipped to the buyer and the settlement documents are presented to him, regardless of the actual receipt of funds. In this case, the date of receipt of income is the day of shipment of goods (works, services, property rights).

With the cash method, the proceeds from sales are determined as payment for the products and the receipt of money either to the company's account in the bank or in cash to the cashier. However, organizations have the right to determine income on a cash basis only if for the previous four quarters the average amount of proceeds from the sale of products (works, services) excluding value added tax and sales tax did not exceed 1 million rubles. for each quarter.

In addition to proceeds from the sale of goods (works, services), property and property rights, firms have non-operating income. The main ones are: income from equity participation in the activities of other organizations; from transactions of purchase and sale of foreign currency; fines, penalties, forfeits received in violation of contractual obligations; income from the lease of property, as well as from the provision for use of rights to the results of intellectual activity; interest received under loan, credit, bank account, bank deposit agreements, as well as on securities; the cost of property or property rights received free of charge, except for goods received in advance or in the form of a pledge; income of previous years, but identified in the reporting period; positive difference from property revaluation (except for depreciable property, securities); the cost of materials obtained during the dismantling of fixed assets; accounts payable written off due to expiration limitation period or on other grounds, except for the amounts written off in accordance with the legislation of the Russian Federation; the cost of surplus inventories identified as a result of inventory and other types of non-operating income.

As a result of the main activity, in addition to proceeds from the sale of products and non-operating income, advances from buyers, amounts in repayment of accounts receivable and other receipts can act as sources of income.

Along with the main activity, the company is engaged in investment and financial activities, as a result of which the corresponding types of income are also generated. So, from investment activities income can be received from the sale of fixed assets, intangible assets; dividends, interest from long-term financial investments, from the repayment of previously issued loans and other types of investment income. As a result of financial activities, income is received from the issue and sale of shares, bonds and other securities.

All cash flows in the three areas of the firm's activities are interrelated and, as necessary, can flow from one area to another. In the Russian economy in transition, there is a movement of funds from all types of activities, mainly to core activities. This is due to the unstable financial position of enterprises in this stage... And since all types of income of the company are concentrated mainly in the main activity, the investment field of activity does not have sufficient funds.

So, income from the sale of products (works, services) is the main type of firm income.

The volume of income from sales of products and, accordingly, profits depends not only on the quantity and quality of products produced and sold, but also on the level of prices applied.

The problem of pricing occupies a key place in the system of market relations. The liberalization of prices carried out in Russia at the end of the 1980s led to a sharp reduction in the influence of the state on the process of price regulation. Since 1992, the pricing system has been essentially reduced to the use of free, i.e. market, prices, the value of which is determined by supply and demand. Government regulation prices are used for a narrow range of goods produced by monopolistic enterprises.

Both free and regulated prices can be wholesale (selling) and retail. Let's consider their composition and structure.

The wholesale price of the enterprise includes the full cost of production and the profit of the enterprise. At the enterprise's wholesale prices, the products are sold to other enterprises or trade and sales organizations.

The industrial wholesale price includes the enterprise wholesale price, value added tax (VAT), excise taxes, and sales tax. At the wholesale price of the industry, products are sold outside the industry. If the products are sold through sales organizations and wholesale trading bases, then the wholesale price of the industry includes a margin to cover costs and generate profits for these organizations.

It is advisable to establish wholesale prices, as before, using free prices. The term "free" means to which point of distribution the buyer is free of shipping costs.

So, at wholesale prices ex-station of departure, all delivery costs to the station of departure are included in the wholesale price, and all subsequent transport costs are borne by the buyer. The prices of the ex-station of departure were previously most prevalent in material-intensive industries, and the prices of the ex-station of destination were in industries served by a centralized system for the sale of mass products, the transportation costs of which were significant, a share in the cost price. However, the economic feasibility of franking wholesale prices in the context of the development of entrepreneurship should be determined not by the forms of supply and sales, but by the influence on commercial activities enterprises of mutually beneficial relations between the manufacturer and the consumer of products. Retail price includes industry wholesale price and trade cape (discount). If wholesale prices are used mainly in intra-economic circulation, then at retail prices goods are sold to the final consumer - the population. The retail price structure is shown in the figure:

The level of free and regulated prices is the most important factor influencing the income from the sale of products, and, consequently, the amount of profit.

Establishing the optimal price level that ensures the profitability of all activities is of key importance in the work of the firm. There are two possible methods of pricing. This is the traditional, so-called cost and market method.

The cost method assumes that the price level should cover all the costs of production and sale of products and ensure profit. This method was widely used by domestic enterprises in the pre-reform period. The amount of costs for the planned output of products was taken into account, and a certain percentage of the markup was added, ensuring the profitable, profitable operation of the enterprise. At the same time, the competitive demand for these products and the possibilities of their sale were not taken into account. The relationship between this price and sales volume, between supply and demand was not taken into account.

The transition to market conditions of management predetermined a different approach to pricing. The price level began to be determined not so much by the costs of the enterprise itself as by the market principles of implementation, the requirements of buyers. Competition, sales volumes, elasticity of demand for these products, and the break-even level began to be taken into account.

So, the size of the company's income depends not only on the volume of proceeds from the sale of products at set prices, but also on the costs of production and sale of these products.

With the development of market relations, more and more often they began to talk about other situations of the origin of revenue growth: this is the profit earned thanks to the initiative of the entrepreneur, the profit obtained under favorable circumstances, unexpectedly allowed and recognized by state authorities (by the relevant legislation).

All sources are interconnected, and their pure content is often impossible to isolate. The most important factors that determine profit are: the introduction of innovations, the absence of fear of risks (risk as a source of profit), rational use of funds, achievement of optimal volumes of activity (that is, the choice of such a scale of the enterprise that allows for optimal profitability). Proven that in terms of profit large enterprises not always the best). The profit grows as long as the interest rate on bank loans is below the rate of return on invested capital; the presence of debt, therefore, is permissible, even in many cases it contributes to the receipt of profit (the so-called leverage effect). Many small and medium-sized enterprises are afraid of debt, which is not always justified. However, using the strategy of voluntary debt, one must be afraid of low profitability, because it will force the company to resort to additional loans with the aim of updating equipment (assortment). And this can lead to a state of reduced solvency and even bankruptcy.

The introduction of innovations as a source of profit involves the production (sale) of a new product (service) of a higher quality, the development of a new market, organizational and managerial innovations, the development of new sources of goods.

The duration of the inflow of profits from the introduction of innovations is determined by the following factors: the importance of the invention, the significance and constancy of the needs satisfied by this product (service), the nature of the activity, patent and licensing legislation in the country, the introduction of innovations; the general strategy pursued by the company in the market, the state of the competitive environment in the industry.

There are situations when the role of the entrepreneur in generating profit or loss is passive. Such situations are generated by: the nature of the activity, the existing structure of the market, the general economic situation, the presence of inflation (it is very beneficial for enterprises with indebtedness and received non-indexed loans and credits).

The main factors characterizing the specifics of the activity: capital-labor ratio, cost level, demand dynamics, market structure.

1.2 Profitability of sales and factors determining it

As a rule, until recently, the financial analysis of the company did not exist in its entirety, and the management of many Russian companies was built primarily on trust, But in the difficult financial and economic situation of the country, many companies, namely the owners of the companies, felt the management their business is not efficient. As you know, there have been major personnel changes in the top management of companies, and many of which were headed directly by the owners (direct beneficial owners). If earlier, it seemed to the business owner that his business was prospering and yielding certain results and making a profit, but after a thorough analysis of the company's activities, many owners came to some confusion about what was really happening and happening in their company. Those people whom they trusted completely, and their business as a whole, did not justify their hopes and trust.

As practice shows, any owner should be wary if everything is going smoothly in his company, without ups and downs, as the popular proverb says: “There are devils in a still pool,” and this is exactly the case. The owners, the top management of companies, are given only the information that they really want to hear, and it is very far from reality and reality.

But again, the owner, having stood at the "helm" of the control of his sinking ship, is unable to cope on his own and direct the ship in the right direction. Perhaps he will know where he wants to go and what result to get, but another question arises: "How"? Some business owners do not quite clearly understand the system of business processes in their offspring.

In this difficult situation, you have to either resort to independent consultants, or recruit a new management team, with certain work experience and competencies. The global financial crisis has benefited many companies, with the aim of identifying unscrupulous managers, carrying out a certain cleaning of personnel and rebuilding all business management processes and reengineering the company as a whole. It is for this reason, and for many others, that any business owner wants to know the profitability of his investments, efficiency of activities, solvency, whether the tactics and strategy of doing business have been correctly chosen, whether financial resources are used correctly, etc. As you know, many companies have taken the path of increasing liquidity, rather than profitability, in order to stay “afloat”.

For the purposes of market relations, the role of financial analysis is obviously great. This is due to the fact that enterprises acquire independence, bear full responsibility for the results of their production, economic and financial activities.

Modern financial analysis has certain differences from the traditional analysis of financial and economic activities. First of all, this is due to the growing influence of the external environment on the work of enterprises. In particular, the dependence of the financial condition of economic entities on inflationary processes, the reliability of counterparties (suppliers and buyers), and the increasingly complex organizational and legal forms of functioning has increased.

Almost every company has an economic or financial department, but due to lack of knowledge and experience, competent financial analysis cannot be entrusted to anyone, the result is important and this is not the case where mistakes and deviations are permissible. A selective approach is important. In theory, any economist or financier can do financial analysis, but in practice this is far from the case. Plus, the employee must have certain information and control the situation.

There are a huge number of methods for conducting financial analysis, which each company chooses for itself, from my own experience, I can note the following, it is important here again A complex approach, thus, it will be correct to use combined method... For clearer and more accurate readings. Each of the methods has its own advantages and disadvantages, first of all, it is important to determine what is the main thing and what the result should be in the end.

A comprehensive assessment of the financial position is carried out using indicators characterizing the potential and actual capabilities of the enterprise to calculate on current liabilities, as well as its financial stability in the long term. The effectiveness of the company's work is considered both from the standpoint of the efficiency of using certain types of resources, such as labor, material and financial.

The purpose of such an assessment is a more detailed description of the property and financial situation, performance results in the reporting period, as well as development opportunities in the future.

Everyone knows that one cannot rely on "bare" financial statements and draw conclusions on the activities and state of the company, there are many other valuation tools. Formally and traditionally, financial analysis can act in accordance with accounting requirements and reporting, but it creates a deceptive picture of financial health in fact. This is due to the fact that managers, using the considerable freedom provided by accounting principles, manipulate data on financial results in order to overestimate the estimated indicators, on the basis of which it is impossible to make strategically important decisions.

Currently, in the world accounting and analytical practice, dozens of indicators are known that are used to assess the state of the company: profitability of sales, return on assets and equity capital, asset turnover, company value, etc. All indicators can be objects of management and characterize the course of a particular process of the company.

Thus, the goal of the company is its efficiency, that is, the relationship between the result obtained and the costs, or, the excess of income over expenses. Nested cash must work efficiently.

How can you measure business performance? In order to assess whether a business is moving in the right direction or needs adjustment, a set of performance indicators is used.

To reduce costs and manage a company, traditional profitability indicators are most effective, which make it possible to dissect the balance sheet of an enterprise from the standpoint of the relationship of its constituent parts with profit.

Profitability is a relative indicator that characterizes the profitability of a business. In English, it is customary to use the term return on investment. Profitability of sales is more correctly called profitability, usually it is denoted by the term margin, i.e. the difference between the selling price and the cost price (Margin), which is understood as the coefficient of profitability, profitability of sales, but the return on sales option is also acceptable.

One of the effective indicators of factor analysis is the so-called DuPont model. This model was proposed by the specialists of the DuPont company (The DuPont System of Analysis) in 1919. By this time, indicators of profitability of sales and asset turnover were widely used. In the DuPont model, for the first time, several indicators were tied together and presented in the form of a triangular structure, at the top of which is the return on assets (ROA) ratio, as the main indicator characterizing the return received from the funds invested in the company's activities, and at the bottom two factor indicators - return on sales (profit margin) NPM (Net Profit Margin) and TAT (Total Assets Turnover).

Later, this model was expanded into a modified factorial model.The main difference between these models is the fractional separation of factors and a change in priorities relative to the effective indicator.

The purpose of the DuPont model is to identify the factors that determine the efficiency of the business, assess the degree of their influence and the emerging trends in their change and significance. The DuPont model is used both for comparative assessment of investment risks and investments in a company.

Key indicators of the DuPont model

ROE - Return on Equity

The owners receive a return on their investments in the form of contributions to the authorized capital. They donate the funds that form the organization's own capital and receive, in return, the right to an appropriate share of the profits. From the point of view of the owners, profitability is best reflected in the form of return on equity and is the most important for the shareholders of the company. Since it characterizes the profit that the owner will receive from the ruble of the funds invested in the enterprise

ROE = Net Income / Equity

ROE has certain limitations. Real income does not come from assets, but from sales. ROE cannot be used to assess the performance of a company's business units. In addition, in most cases, companies have a significant share of borrowed capital. For example, in the banking sector, debt capital is generally the basis of all business. Virtually all operating activities the bank is based on attracted deposits, and its own capital acts only as a reserve, a guarantor of the bank's solvency and financial stability. One way or another, how the accounting ROE gives an idea of ​​the income that the company earns for its shareholders.

TAT - Asset Turnover

The asset turnover reflects how many times during the period the capital invested in the assets of the enterprise is turned around, that is, it evaluates the intensity of the use of all assets, regardless of the sources of their formation. On the other hand, it shows what part of the revenue the company has from the funds invested in assets. The growth of this indicator indicates an increase in the efficiency of their use.

ROS - Return on Sales

It is used as the main indicator for assessing the financial performance of companies that have relatively small amounts of fixed assets and equity capital.

Indeed, too low a value of the denominator in calculating profitability leads to the fact that the return on equity is too high, and, therefore, overestimate the actual financial potential of the organization. Evaluating the profitability of sales in this case allows a more objective look at the state of affairs.

Shows how much net profit the company receives from each ruble of products sold. In other words, how much money remains with the enterprise after covering the cost of production, paying interest on loans and paying taxes. The indicator of profitability of sales characterizes the most important aspect of the company's activity - the sale of main products, and also allows us to estimate the share of the cost price in sales.

ROA - Return on assets

Return on assets is an indicator of the efficiency of an enterprise's operations. It is the main production indicator that reflects the efficiency of using the invested capital.

ROA = NetIncome / TotalAssets

ROA = Net Income / Total Assets x Sales / Sales = Net Income / Sales x Sales / Total assets

Thus, the return on total assets is determined by two factors: profitability of sales and asset turnover. Both of these factors form a multiplicative model. This model clearly reflects the financial statements, the first indicator reflects the "income statement", the second - the balance sheet asset and, accordingly, the third - the balance sheet liability.

Leverage: the ratio of the company's debt to equity capital and the impact of this ratio on net income. The higher the share of borrowed capital, the lower the net profit, due to the increase in interest expenses. A highly leveraged company is called a financially dependent company. A company that finances its activities with only equity capital is called a financially independent company.

The level of financial leverage can be interpreted, on the one hand, as a characteristic of the financial stability and riskiness of a business, and on the other hand, as an assessment of the efficiency of the enterprise's use borrowed money.

Leverage = Debt / Equity

Leverage = Assets / Equity

The return on equity depends on the financial leverage. Leverage differential is the difference between the return on total assets and the cost of debt. In turn, the cost of borrowed capital is defined as the ratio of interest expenses to the amount of borrowed capital, taking into account the effect of the tax shield.

Leverage = Debt / Equity

Leverage Effect = (ROA - CDC) x Debt / Equity

CDC = (Iut + It (1-T)) / D

CDC - cost of borrowed capital,

Iut - part of the interest expense not subject to income tax,

It is the interest expense subject to income tax.

In general, if all interest expenses are taxable (this assumption greatly simplifies the calculation), the cost of borrowed capital is calculated as:

CDC = I / D x (1-T)

LE can be expressed:

LE = (ROA - I / D x (1-T)) x D / NW

The part (ROA - CDC) is called the leverage differential.

Financial leverage increases the return on equity. Therefore, the higher the leverage, the greater the shareholder value. This is very important for optimizing the structure of assets (unless, of course, you doubt the theory of Merton-Miller, which states that the structure of capital does not matter at all). Additional capital should be increased as long as the leverage is positive. If the cost of borrowed capital exceeds the return on assets, the leverage will be negative. In addition, financial sustainability considerations need to be considered. The buildup of debts can put the company at risk of bankruptcy.

The easiest way to determine the limit of equity capital adequacy is that equity capital should cover the amount of fixed and illiquid assets. In other words, the borrowed capital should not exceed the amount of the company's liquid assets, due to which it can be repaid.

The obtained values ​​can be used as initial data and benchmarks for building an enterprise policy in the main areas of activity:

Profitability of sales

· price policy

Management of permanent and variable costs

Selection of the optimal sales volume

Control over the ratio of operating and non-operating expenses

· other

Asset turnover

· asset Management

Credit policy

Stock management system

· other

Capital structure

· choice capital structure,

· Cost of capital

· tax policy

Long-term to short-term debt ratio

· other

The main stages of the analysis using the DuPont model:

General assessment of the effectiveness of the company's financial resources management.

The indicator of the efficiency of the company's financial resources management is the return on equity. Its value depends on decisions taken in the main areas of the enterprise (financial, investment and main).

A change in this indicator indicates a general trend of increasing or decreasing business efficiency.

Return on assets reflects the efficiency of using the invested capital, and connects the main and investment activities of the enterprise, which are characterized by return on sales and asset turnover.

Evaluation of the effectiveness of the main activity management

The indicator of profitability of sales (management of production costs, sales volume and selling prices).

A change in this indicator can be caused by both external factors (inflation, competition, legislation, etc.) and internal (quality control, cost structure, management accounting, etc.).

Consider possible options changes in profitability of sales under the influence of various factors

1. Increase in profitability of sales.

Revenue growth rates outstrip cost growth rates.

Possible reasons:

Sales growth;

Change in the assortment of sales.

With an increase in the number of products sold (in kind), revenue increases faster than costs as a result of the so-called production leverage.

The main elements of the cost of production are variable and fixed costs. Changes in the cost structure can significantly affect the amount of profit. Investment in fixed assets is accompanied by an increase in fixed costs and, in theory, a decrease in variable costs. However, the relationship is non-linear, so finding the optimal mix of fixed and variable costs is not easy.

In addition to simply raising prices for an existing range of products, a company can achieve revenue growth by changing the range of products it sells. This tendency in the development of the enterprise is favorable.

Cost reduction rates outpace revenue decline rates.

Possible reasons:

Rising prices for products (works, services);

Changing the structure of the assortment of sales.

In this case, there is a formal improvement in the profitability indicator, but the volume of proceeds decreases, the trend cannot be called unequivocally favorable. For the correct conclusions, it is necessary to analyze the pricing policy and the assortment policy of the enterprise.

Revenue increases, costs decrease.

Possible reasons:

Price increases; change in the assortment of sales;

Changes in cost rates.

This trend is favorable and further analysis should be carried out in order to assess the sustainability of the company's position.

2. Decreased profitability of sales.

Cost growth rates outstrip revenue growth rates.

Possible reasons:

Inflationary cost growth outstrips revenue;

Price reduction;

Changing the structure of the assortment of sales;

Increase in cost rates.

This is an unfavorable trend. To remedy the situation, it is necessary to analyze the pricing issues at the enterprise, the assortment policy, the existing cost control system.

The rate of decline in revenue is faster than the rate of decline in costs.

Possible reasons:

Reduced sales.

This is a common situation when an enterprise reduces its activity in this market for any reason. Revenue declines faster than costs as a result of production leverage. It is necessary to analyze the marketing policy of the company.

Revenue decreases, costs increase.

Possible reasons:

Price reduction;

Increase in cost rates;

Changing the structure of the assortment of sales.

An analysis of pricing, cost control systems, assortment policies is required.

In normal (stable) market conditions, the dynamics of changes in revenue and costs corresponds to situations when revenue changes faster than costs only under the influence of production leverage. The rest of the cases are associated either with changes in the external and internal conditions for the functioning of the enterprise (inflation, competition, demand, cost structure), or with a poor system of accounting and control in production. In addition, the profitability of sales when using this calculation formula is influenced by the financial results from operating and non-operating activities. As a rule, their impact on the indicator is short-lived, therefore, when formulating conclusions about the effectiveness of the main activity of the enterprise, these factors should be excluded, or they should be considered separately.

Assessment of the effectiveness of enterprise asset management ( investment activities)

Investment is the main driving force behind any business. Investments must ensure uninterrupted day-to-day operations and production, and ensure further development companies (market expansion, diversification, quality improvement).

Main areas of investment:

Working capital (short-term investments supporting current activities).

Fixed assets, capital construction (long-term investments associated with prospective development).

Intangible assets (long-term investments related to prospective development).

The growth of this indicator indicates an increase in the efficiency of using the assets of the enterprise and is considered as a positive trend, a decrease indicates the presence of problems in management. If the asset turnover decreases, then in the process of analysis it is necessary to study in more detail the capital turnover indicators and establish at what stages of the circulation there was a slowdown (or acceleration) in the movement of funds.

It should be borne in mind that the turnover of assets also depends on the organic structure of capital: the greater the share of fixed capital, which turns slowly, the lower the turnover ratio and the longer the duration of the turnover of the total total capital.

Assessment of the effectiveness of financial management.

To characterize the financial activity of an enterprise in the DuPont model, the main indicator is used - Financial leverage. Characterizes the ratio between debt and equity capital.

The greater the relative volume of borrowed funds attracted by the enterprise, the more more amount interest paid on them, and the higher the level financial leverage... Consequently, this indicator also allows you to estimate how many times the gross income of the company (from which the interest on the loan is paid) exceeds the taxable profit.

Systems approach. General description of the method

This approach is based on the simple idea that any business can be represented as an interconnected system of movements of financial resources caused by management decisions. Each of these decisions ultimately has a positive or negative economic impact on the company. In essence, the process of managing any enterprise is a series of economic decisions that cause the movement of financial resources that support the company's activities.

In the interests of business owners, the company's management makes decisions on the use of various resources to obtain the expected economic benefits.

The main economic components of a business:

· Investment activity (management of investments in non-current and current assets);

· Main activity (production, trade, services) through the use of these resources (cost, volume and price management);

· Financial activities (selection of sources of funding to ensure the efficient operation of the enterprise).

The relationship between the main, investment and financial activities of the enterprise.

Relationship:

1. High rates of investment in non-current assets for industrial enterprises can lead to a shortage of own working capital, a decrease in solvency and a decrease in the efficiency of core activities (decrease in volumes, increase in costs). On the other hand, refusal to invest can lead to a production stoppage, decrease in product quality and loss of competitiveness.

2. When attracting additional sources financing, in a limited market, it will not be possible to effectively invest in the company, get additional profits and pay off interest. In this case, the company incurs losses. If the market grows, the lack of additional funding sources will lead to lost profits.

3. Improving the efficiency of core activities should also be coordinated with investment and financial activities (the amount of working capital, whether additional capacities are needed, sources of funding).

The art of company and business management lies in finding a balance between the main components of the business (investment, core and financial activities).

IN ADDITION

ROI - Return on investment.

Return on investment.

ROI is calculated as the product of return on sales and asset turnover. Each of these two indicators, in turn, is decomposed into groups of factors, the combined action of which affects the specific values ​​of the indicators.

ROI calculation scheme:

The multifactorial ROI ratio makes it convenient tool for predictive modeling: by changing the value of one factor or another, one can observe how the final result changes, or, conversely, having fixed the required ROI value, see within what limits it is permissible to vary the factor components.

FINANCIAL RATIO

RATES OF PROFITABILITY

SHARE CAPITAL IN ORDINARY SHARE FORM (ROSF)

Return on ordinary shareholders funds - measures the amount of profit for the period to be distributed among the owners of ordinary shares with the amount of their investment in the company's capital.

INVESTED CAPITAL (ROCE)

Return on capital employed - coefficient expressing the ratio between the profit generated by the company and long-term investments (capital). The data allows you to measure the aggregate return on all investments that provide long-term business financing, before interest is paid to creditors and dividends are paid to shareholders.

RETURN ON SALES (ROS) BASED ON OPERATING PROFITS

Net profit margin - ratio of profit for the period to sales. The ratio of operating efficiency is used for comparison purposes, since the difference caused by the methods of financing a particular enterprise does not affect its value.

BASED ON GROSS PROFITS

Gross profit margin is the ratio of the company's gross profit to the sales volume achieved over the same period. Gross profit is the difference between the volume of sales and the cost of goods sold. This ratio measures the profitability of purchases (or production) and subsequent sale of goods before any other costs are taken into account. Since cost of goods sold represents a major share of costs for retailers and wholesalers, and manufacturing enterprises, the dynamics of this indicator can seriously affect the net profit.

EFFICIENCY COEFFICIENTS

AVERAGE PERIOD OF INVENTORY TURNOVER

It measures the average number of days.

AVERAGE PERIOD OF SETTLEMENTS WITH DEBTORS

Average settlement period for debtors - the period of time during which the accounts receivable are repaid.

AVERAGE PERIOD OF SETTLEMENTS WITH CREDITORS

Average settlement period for creditors - the period of time during which accounts payable are paid.

RELATIONSHIP BETWEEN PROFITABILITY AND EFFICIENCY

The ratio of sales to capital employed. The total return on equity is determined by both the return on sales and the efficiency in the use of capital.

LIQUIDITY RATIO

CURRENT LIQUIDITY RATIO

RELATIONSHIP OF CURRENT ASSETS TO SHORT-TERM OBLIGATIONS

Current ratio - the ratio of the company's liquid assets (cash and assets) with short-term liabilities (up to a year).

FINANCIAL LEVER RATIO (LEVERAGE)

The share of long-term liabilities in the total amount of the applied capital of the company.

1.3 Methods for managing revenue and profitability of sales

The economic effect of the activity of an economic entity is expressed as an absolute indicator of profit. Economic efficiency the work of the organization is characterized by relative indicators - a system of indicators of profitability, or profitability (profitability) of the organization.

Profitability measures measure the profitability of an organization from various perspectives in accordance with the interests of the participants in the operation of the business. In foreign and domestic literature, a wide range of profitability indicators is considered, the method of calculating which differs depending on the analytical and managerial tasks.

Profitability metrics measure profitability from different perspectives. General formula calculating profitability:

The numerator can be:

Profit from the sale of products;

Profit before tax;

Profit before interest and taxes (economic profit);

Net profit.

The denominator can be:

Assets (or capital) of the organization;

Equity;

Permanent capital (the amount of equity and long-term borrowed funds);

Current assets:

Basic production assets;

Production assets (the sum of fixed production assets and production working capital);

Proceeds from product sales; cost of products sold.

The use of such an extensive composition of indicators and their combinations for calculating profitability in practical and analytical work is, on the one hand, a consequence of the complexity of financial and economic activities, and on the other hand, it makes it difficult to adequately interpret the results obtained.

In practice, the following group of profitability indicators, calculated on the basis of financial statements, stood out:

The return on total capital (total assets) in terms of accounting profit (profit before tax) is equal to the ratio of profit before tax to the average annual value of assets;

The total return on equity in terms of accounting profit (profit before tax) is equal to the ratio of profit before tax to the average annual cost of equity;

Return on sales by net profit is equal to the ratio of net profit to proceeds from product sales;

The profitability of sales in terms of profit from sales is equal to the ratio of profit from sales to proceeds from sales of products;

Return on equity in terms of net profit is equal to the ratio of net profit to the average annual cost of equity capital.

The considered indicators of profitability, if necessary, can be calculated at the beginning or end of the reporting period. In such cases, the denominator of the fraction shows indicators, respectively, at the beginning or end of the period.

In foreign literature (and recently in domestic), profitability indicators are used, calculated in other ways and used to solve special problems. These include, in particular, the so-called gross profitability ratio, determined by the ratio of gross profit or marginal income (excess of the volume of products sold over variable costs) to the volume of products sold. This indicator is used in the break-even analysis.

When assessing efficiency and making long-term investment decisions, the profitability indicator is used, calculated on the basis of net cash flow.

The decomposition of the profit of the organization and its total capital into separate various components (or their combinations) and the determination of the ratio between the corresponding indicators of profit and capital reflect the private profitability of certain types of production, investment and financial activities of the organization, various resources and sources of their financing.

As shown, a typical situation in the practice of domestic companies is the presence of a large number of calculated profitability indicators, combined with very modest conclusions about the reasons for the economic difficulties of the organization or, conversely, about its reserves and advantages. This determines the inadequacy of management information, the limited use of the results of extensive calculations for decision-making.

At the same time, management decision-making should be based on the use of a small number of key parameters (relative financial and economic indicators) that characterize the main blocks of the organization's activities in the current context and the expected future.

The effectiveness of management decisions made based on the use of profitability indicators can be achieved if a number of conditions are met:

The correct choice of the control object and a clear statement of the goal of the problem being solved;

Substantiation of the method for calculating the analyzed indicators;

Revealing the quantitative and qualitative assessment of the relationship between the factors that determine the level of the considered parameters;

Economic interpretation of the results obtained, comparing them in dynamics with similar indicators of other companies, the average industry level, adopted "safe" standards;

Formulation of conclusions highlighting the strengths and weaknesses, zones of "risk and well-being", the allocation and ranking of factors that create the possibility of achieving the goal;

Making a decision based on the use of the findings and influencing the level of profitability through control factors.

If we take into account that the goal of management is the profit of the organization as a whole, then the following indicators of profitability must and should be used as financial and economic indicators (Table 1).

Table 1. Algorithms for calculating profitability indicators

Most overall indicator in the group of indicators of return on equity is the return on assets. This indicator is also called the rate of return.

The level and dynamics of the return on assets indicator are the main object of attention of the company's managers, since the return on total capital accumulates the structure and movement of all types of production and financial resources of the organization, production and circulation costs, the size, structure and compliance with the market demand of manufactured products or performed works (services ). The return on assets indicator reflects the balance of economic interests of internal and external business participants achieved in the company. The use of net profit for calculating the return on assets seems to be inadequate, since the assets must generate profit sufficient not only to solve internal problems, but also to fulfill the organization's obligations to the state.

At the same time, the return on assets indicator, calculated on the basis of net profit, can be used in addition to the main one to assess such an important aspect. management activities like tax policy (tax planning).

The return on equity ratio is important for the owners (shareholders) of the company who invest their funds in the business in order to obtain a return on invested capital.

The return on equity is compared to the income earning potential of investing these funds in alternative options for activities, including investments in financial assets. In countries with developed market economies, this indicator serves as an important criterion for evaluating (quoting) shares on the stock exchange.

The profitability indicators discussed above characterize quite certain aspects of the organization's activities, at the same time they are interconnected, which reflects the objective links between various aspects of production, financial and management processes. The balance, and hence the validity of management decisions, largely depends on the degree and method of accounting for such relationships. The design and use of models reflecting these relationships significantly increases the level of management in certain areas of production and financial activities and the company as a whole.

Chapter 2. Analysis of the financial and economic activities of CJSC "Wild Orchid"

2.1 Analysis of the financial condition of CJSC "Wild Orchid"

The group of companies "Wild Orchid" was founded in 1993, now it is the largest network of multi-brand stores in Russia for lingerie, home and beachwear. At the end of 2010, Wild Orchid CJSC is a major distributor of international brands of lingerie and accessories in Russia and Ukraine, about 95% of which are in exclusive use. The assortment includes such brands of lingerie as Millesia, Nina Ricci, Cotton Club, Christian Dior, GianfrancoFerre, Givenchy, ChristianLacroix, RobertoCavalli, AlbertaFerretti, Dolce & Gabbana, etc. own brands: "Vendetta" and "Decollete", which are made in Russia and Southeast Asia.

The mission of the Society is to provide an opportunity for a convenient and pleasant purchase of underwear, including for home and beach use, that meets the most modern requirements of fashion, style and quality for all segments of the population.

CJSC Wild Orchid is represented in the lingerie market by the following retail chains:

Retail network "Wild Orchid". The concept of stores is the presentation of the best brands of lingerie and swimwear with the characteristics of "fashion", "season", "luxury", "brand". The style and design of this lingerie is mainly of European origin. Currently, the brand is the most popular among the stores selling lingerie. Due to this, ZAO Wild Orchid is a direct customer, in most cases an exclusive distributor of the best European and world brands of lingerie on the territory of the Russian Federation. In addition, this allows you to maintain the required price level, quality and customer loyalty.

Retail network "Bustier". The concept of stores is the presentation of brands of lingerie and swimwear with the characteristics of "fashion", "season", "brand", "democratic", "energetic", "youth". The style and design of Bustier lingerie is mainly of European origin. Bustier's target clientele is middle class and high-income consumers. Since the end of 2004, the stores have been selling underwear under its own trademark "Vendetta".

At the end of 2005, ZAO Wild Orchid entered the Ukrainian lingerie market with the Wild Orchid and Bustier chains.

The Bustier network is developing at a high rate for two reasons: firstly, the Bustier brand is positioned in a more demanded democratic format, and secondly, it is a distribution channel for its own brand"Vendetta".

Bellevoy Bazar stores are discount stores that allow you to eliminate seasonal stocks of goods.

VI Legion stores - shops for men's underwear, home and beachwear. The stores feature the best European brands.

Two Internet shops (Russia, Ukraine) sell goods from the Wild Orchid and Bustier stores of the current season, as well as goods from previous seasons with discounts.

The first online store was opened in 2003 (Russia). And at the beginning of 2007, the second online store in Ukraine began its work. Taking into account the rapid development of the Internet in Russia and Ukraine, as well as the growth of e-commerce turnover, Wild Orchid CJSC intends to increase the volume of trade in Internet stores by 40-50% per year.

"Beletage" is a wholesale division. The clients are independent retailers.

The Defile retail chain is a mono-brand lingerie store, in which the Defile brand of the same name is presented. In addition to the low price, competitive advantage new brand - a wide range of sizes. About 30 collections of lingerie are constantly presented in the store, the collections are updated every two weeks.

The opening of Defile stores allowed the Company to enter the mass market segment.

The Wild Orchid group includes:

Retail chain "Wild Orchid" - 64 stores

Retail network "Bustier" - 186 stores

Retail network "VI Legion" - 10 stores

Retail chain "Defile" - 44 stores

Discount chain "Bellevoy Bazar" - 4 stores

Online store www.wildorchid.ru

Garment factory in Gagarin (Smolensk region)

Sewing workshop in Moscow

Thus, ZAO Wild Orchid operates in two price segments: high (Wild Orchid chain stores, VI Legion) and medium (Bustier chain stores).

In the upper price segment, the chains of stores "Wild Orchid" and "Estelle Adoni" compete.

In the middle price segment, the chains of shops “Bustier”, “Golden Dragonfly” (“Estelle Adoni”), DIM (“Eurogroup”), “Angelica”, “Kokon” (“Lediva Rosa”), Mia-mia, Women`Secret , Etam, Intimissimi.

Every year the company holds a "Grand Defile" - a show of new collections of lingerie and beachwear. Every year the show of "Wild Orchid" gathers about 5,000 guests, including representatives of the Russian show business and the business world.

Retail trade today is at a stage when retail space is still scarce, and they are located mainly in the central region. In this regard, retail trade is developing at a high rate and this period, according to the forecasts of CJSC "Wild Orchid", will continue for quite a long time. The population's demand for retail space is high, and the market is far from saturation.

The number of brands on the Russian market increases several times every year. In addition to well-known countries - suppliers of luxury lingerie, such as Italy (IdeaStella, LaPerla), France (LadydeParis, ChristianLacroix), Germany (NINAVON, Felina,), Spain (OtHaik "a, PRINCESA) and the USA (Playtex, Wonderbra), on manufacturers of mid-price brands from Denmark (ARDI), Poland (Key), Czech Republic (Pelican), Latvia (Lauma, Roksa), Serbia and Montenegro (Vis-a-Vis) are entering the Russian market. It is formed mainly by “nameless” underwear from Asian countries. Products from China and Korea occupy 95% of the total volume of the segment of the market for inexpensive underwear in the informal trade market. The remaining 5% are accounted for by Russian and Belarusian manufacturers (Cheryomushki, “ Red Dawn "," Milavitsa ", etc.).

In the coming years, new brands (local, less famous) will appear on the market, the range of products will increase, and the geography of sales will expand. More recently, underwear stores offering quality goods were located only in Moscow and St. Petersburg. The total assortment of goods in stores in other cities of Russia was small. And only in the last three to four years, retail chains began to expand into the regions. The range of regional products has become diversified, in particular, the model range and the supply of related products (home clothes, accessories, etc.) have increased.

The analysis of the financial condition of CJSC "Wild Orchid" presented in this report was carried out for the period from 01.01.2009 to 31.12.2009. A qualitative assessment of the values ​​of financial indicators of CJSC "Wild Orchid" ").

Table 1. Structure of property and sources of its formation

* Immobilized funds include non-current assets and long-term receivables (i.e. least liquid assets).

** Current assets are current assets, excluding long-term receivables.

From the data presented in the first part of the table, it can be seen that on the last day of the analyzed period (12/31/2009), the share of immobilized funds in the assets of the organization is one third, and current assets - two thirds. The organization's assets for the period under review increased by 552,963 thousand rubles. (by 12.4%). Although there was an increase in assets, equity capital decreased by 187.1%, which negatively characterizes the dynamics of changes in the property status of the organization.

The diagram below clearly shows the ratio of the main groups of assets of the organization:

The growth in the value of the organization's assets is mainly associated with the growth of the following positions of the balance sheet asset (the share of changes in this item in the total amount of all positively changed items is indicated in parentheses):

· Accounts receivable (payments for which are expected within 12 months after the reporting date) - 1,430,335 thousand rubles. (59.5%)

· Long-term financial investments - 814,751 thousand rubles. (33.9%)

At the same time, in the liabilities of the balance sheet, the greatest increase is observed in the lines:

· Long-term loans and credits - 1,017,266 thousand rubles. (69.9%)

· Accounts payable: suppliers and contractors - 407 855 thousand rubles. (28%)

Among the negatively changed balance sheet items, one can distinguish "stocks: finished goods and goods for resale" in assets and "retained earnings (uncovered loss)" in liabilities (-1,101,073 thousand rubles and -611,731 thousand rubles, respectively).

As of December 31, 2009, the value of the organization's equity capital was -284,710.0 thousand rubles. During the analyzed period, the decrease in the organization's equity capital amounted to 611,731.0 thousand rubles.

The coefficient of autonomy of the organization on the last day of the analyzed period (31.12.2009) was -0.06. This ratio characterizes the degree of dependence of the organization on borrowed capital. The value obtained here indicates the complete dependence of the organization on borrowed capital. During the analyzed period, the autonomy ratio sharply decreased (-0.13).

The diagram below clearly shows the ratio of the organization's equity and debt capital: It should be noted that equity capital is not reflected in the diagram, since it is completely absent.

During the analyzed period, the ratio of the provision of own circulating assets decreased very strongly - from -0.09 to -0.47 (by 0.38). As of December 31, 2009, the value of the coefficient does not meet the standard and is in the area of ​​critical values.

During the period under review (01.01-31.12.2009), there was a slight increase in the investment coverage ratio from 0.6 to 0.61. The value of the coefficient as of the last day of the analyzed period (31.12.2009) is below the norm (the share of equity capital and long-term liabilities in the total capital of ZAO "Wild Orchid" is only 61%).

The ratio of supply of material stocks for the period under review (2009) rapidly decreased by 1.22 and amounted to -1.36. As of 12/31/2009, the ratio of the availability of inventories is critical.

The ratio of short-term debt shows that as of December 31, 2009, the share of short-term debt in the total debt of CJSC "Wild Orchid" is 36.5%. At the same time, during the analyzed period, the share of short-term debt decreased by 6.7%.

Table 3. Analysis of financial stability in terms of surplus (shortage) of own circulating assets

* Surplus (shortage) SOS is calculated as the difference between own working capital and the amount of stocks and costs.

Since as of December 31, 2009, there is only a shortage of own circulating assets, calculated according to the 1st option (SOS 1), the financial position of the organization on this basis can be characterized as normal. Moreover, two of the three indicators of coverage of inventories and costs by own circulating assets improved their values ​​for the year.

Table 4. Analysis of the ratio of assets by the degree of liquidity and liabilities by maturity

Of the four ratios that characterize the ratio of assets in terms of liquidity and liabilities in terms of maturity, only one is fulfilled. CJSC "Wild Orchid" does not have enough cash and short-term financial investments (highly liquid assets) to pay off the most urgent liabilities (the difference is 1,465,788 thousand rubles). In accordance with the principles of the optimal structure of assets in terms of liquidity, short-term receivables should be sufficient to cover medium-term liabilities (short-term loans and borrowings). In this case, this ratio is fulfilled - CJSC "Wild Orchid" has enough short-term accounts receivable to pay off medium-term obligations (5 times more).

The main financial results of CJSC "Wild Orchid" for the last year are shown in the table below.

From the "Profit and Loss Statement" it follows that for the period under review (01.01-31.12.2009) the organization received a loss from sales in the amount of 138,660 thousand rubles, which is equal to 11.3% of the proceeds. This result is fundamentally different from the same period last year, when there was a profit of 29,412 thousand rubles.

In comparison with the previous period, both sales revenue and expenses for ordinary activities decreased in the current one (by 1 986 357 and 1 818 285 thousand rubles, respectively). Moreover, in percentage terms, the change in revenue (-61.8%) is ahead of the change in expenses (-57.1%)

Paying attention to line 040 of form No. 2, it can be noted that the organization, as in the previous year, took into account general business (management) expenses as conditionally fixed, referring them at the end of the reporting period to the sales account.

Loss from other transactions during the entire analyzed period amounted to 521,671 thousand rubles, which is by 194,258 thousand rubles. (59.3%) more than the loss for the same period last year. At the same time, the amount of loss from other operations is 376.2% of the absolute amount of loss from sales for the analyzed period.

The equality of indicators in the last two rows of the above table indicates that the organization has not repaid the loss of previous years for the last year.

The change in deferred tax assets reflected in Form No. 2 "Profit and Loss Statement" (page 141) for the reporting period does not correspond to the change in data on line 145 "Deferred tax assets" of the Balance Sheet. The revealed inaccuracy is also confirmed by the fact that even in the balanced form, the deferred tax assets and liabilities in Form No. 1 and Form No. 2 for the reporting period do not coincide.

The graph below clearly shows the change in revenue and profit of CJSC "Wild Orchid" during the entire analyzed period.

In addition, there is a negative dynamics of sales profitability compared to this indicator for the same period last year.

Further in the table, the indicators of the turnover of a number of assets are calculated, characterizing the rate of return of funds advanced for entrepreneurial activities, as well as the indicator of the turnover of accounts payable in settlements with suppliers and contractors.

Asset turnover data for the last year indicates that the organization receives revenue equal to the sum of all available assets for 1410 calendar days (i.e. 4 years). It takes 561 days to get revenue equal to the average annual inventory balance.

2.2 Factor analysis of revenue and profitability

The total number of financial indicators used to analyze the activities of the enterprise is very large. In this work, only the main coefficients and indicators will be considered and, accordingly, the main conclusions that can be drawn on their basis. For the sake of a more streamlined review and analysis, financial indicators will be considered in the following order:

1. Operational analysis.

2. Analysis of transaction costs.

3. Asset management.

4. Indicators of liquidity.

5. Indicators of profitability.

6. Indicators of capital structure.

Balance sheets and profit and loss statements of CJSC "Wild Orchid" for 2007-2009 were used as initial data.

Operational analysis.

The ratios of these coefficients of change in gross sales clearly indicate that the company had a very significant increase in sales in 2007 compared to the previous year. At the same time, the growth rates of sales volumes in 2008 decreased significantly, and already in 2009 they decreased by 61, 82%.

Considering that the average annual growth rate of the lingerie market is 7-8% per year, we can conclude that in 2007, Wild Orchid CJSC expanded its market segment, pushing out its competitors, but already in 2009 the company lost a number of its market positions. The fundamentally changed situation in the world economy in the second half of 2008, the global financial and economic crisis, a sharp slowdown in economic growth led to a reduction in effective demand for consumer goods, which naturally led to a drop in demand for underwear and related products, and as a result - a sharp decline in revenue in the period under review.

From these coefficients of gross income, it follows that the indicators have worsened. Obviously, the company could not keep the cost of goods sold at a constant level. In the structure of sales, the predominant share is occupied by imported goods, and since September 2008, as a result of the deteriorating macroeconomic situation, amid the global financial crisis, the ratio of financial flows has sharply changed.

In this situation, the ruble exchange rate came under serious pressure, which led to an increase in the cost of goods and materials purchased abroad.

Service profitability calculated under different conditions

Gradually replacing the base level of each factor with the actual one, we determined how much the level of profitability of production capital changed due to wage intensity, material consumption, capital intensity, i.e. due to production intensification factors. In our case, the level of influence of factors on profitability is 7.224%.

Over the past year, the organization received a loss both from sales and from financial and economic activities in general, which led to the negative values ​​of all three profitability indicators presented in the table for this period.

The calculated values ​​of the operating profit indicators allow us to conclude that the company's performance in 2008 in terms of operating profit decreased even more significantly compared to the gross income indicator, which indicates unnecessary commercial and administrative expenses. In 2009, due to a decrease in selling expenses, the situation improved relatively, but this did not affect the rate of decline in the operating profit ratio.

The resulting decrease in net profit by elements has already been explained above when analyzing the previous indicators. It should also be added that the relative decline in this indicator for 2009 is more significant compared to the decline in operating profit. This suggests that the debt burden worsened the company's position, reducing its net income.

One of the indicators of the likelihood of an early bankruptcy of an organization is the Altman Z-score, which is calculated using the following formula:

Z-score = 1.2K 1 + 1.4K 2 + 3.3K 3 + 0.6K 4 + K 5

The estimated probability of bankruptcy depending on the value of the Altman Z-score is:

· 1.8 or less - very high;

· From 1.81 to 2.7 - high;

· From 2.71 to 2.9 - there is a possibility;

· From 3.0 and above - very low.

According to the results of calculations based on the reporting data of CJSC "Wild Orchid", the value of the Z-account as of December 31, 2009 was 0.75. This suggests that there is a very high probability of imminent bankruptcy of CJSC Wild Orchid. At the same time, it should be noted that there are serious shortcomings in the use of the Altman Z-account in the conditions of the Russian economy, which do not allow unconditionally trusting the conclusions obtained on its basis.

Chapter 3. Measures to improve the management of revenue and profitability of sales

Based on the results of the analysis, the main indicators of the financial position (as of December 31, 2009) and the results of the activity of CJSC "Wild Orchid" for the period from 01.01.2009 to 31.12.2009, which are given below, were identified and grouped according to a qualitative criterion.

The indicator that has an exceptionally good value is the following - the quick (intermediate) liquidity ratio is fully consistent with the standard value.

The financial position of the organization is positively characterized by the following indicator - normal financial stability in terms of its own circulating assets.

The indicator that is significant at the border of the standard is the following - the normal ratio of assets in terms of liquidity and liabilities in terms of maturity is not fully observed.

The following 3 indicators of the financial position of the organization have unsatisfactory values:

· The current (total) liquidity ratio is lower than the accepted norm;

· Negative dynamics of changes in the organization's equity capital despite the fact that the assets of CJSC "Wild Orchid" increased by 552,963 thousand rubles. (by 12.4%);

· The investment coverage ratio is below the norm (the share of equity capital and long-term liabilities in the total capital of CJSC "Wild Orchid" is only 61%).

On the critical side, the financial position and results of the activities of CJSC "Wild Orchid" are characterized by the following indicators:

· The equity ratio has a critical value - -0.06 (there is no equity capital);

· Net assets are less than the authorized capital, while during the period there was a decrease in the value of net assets;

· As of December 31, 2009, the ratio of provision with own circulating assets has an extremely unsatisfactory value, equal to -0.47;

· The ratio of absolute liquidity is significantly lower than the normal value;

· For the analyzed period, a loss from sales was received (-138,660 thousand rubles), and there was a negative trend compared to the same period last year (-168,072 thousand rubles);

· Loss from financial and economic activities during the entire analyzed period amounted to -611,731 thousand rubles;

· Negative dynamics of the financial result before interest payable and taxation (EBIT) per ruble of the organization's proceeds (-XX, X kopecks from the same indicator for the same period last year (01.01-31.12.2008)).

Rating assessment of the financial position and performance of CJSC "Wild Orchid"

According to the results of the analysis, the financial position of CJSC "Wild Orchid" was assessed by a point system, which corresponds to the CC (bad position) rating. The financial results of the organization for the period under review correspond to the D rating (critical results). It should be noted that the final estimates were obtained taking into account both the values ​​of the indicators at the end of the analyzed period and the dynamics of indicators, including their predicted values ​​for the next year.

The following table calculates the indicators recommended in the methodology of the Federal Office for Insolvency (Bankruptcy) (Order No. 31-r of 08/12/1994).

Since both coefficients on the last day of the analyzed period turned out to be less than the norm, the coefficient of restoring solvency was calculated as the third indicator. This ratio serves to assess the prospects for the restoration of the normal structure of the balance sheet (solvency) by the enterprise within six months, while maintaining the trend of changes in current liquidity and equity capital that took place in the analyzed period. The value of the coefficient of recovery of solvency (0.87) indicates the absence in the near future of a real opportunity to restore normal solvency. It should be noted that these indicators of an unsatisfactory balance sheet structure are quite strict, therefore conclusions on their basis should be made only in conjunction with other indicators of the financial position of the organization. In addition, industry specificity is not taken into account in the calculation.

One of the most significant methods of improving the position of our company is the assortment policy management system. Before proceeding with the description of the technology, I would like to note one important aspect of assortment management. For the majority of Russian enterprises, the main reserve for assortment optimization still lies in a significant reduction in the assortment range. In addition to the impact on the economy of the enterprise, a large assortment diffuses the strength of the company, makes it difficult to competently offer the goods to customers (even the sales staff are not always able to explain the difference between a particular position or name), and scatters the attention of end consumers.

When optimizing the assortment, you first need to calculate all of the above indicators: revenue, profitability, contribution to coverage ratio, operating leverage, break-even point, financial strength for each product name. The starting points for such calculations are prices and sales volumes for each item, as well as the cost of production and its division into variable and fixed costs.

1. First of all, you should pay attention to the profitability indicator of each position. If there are positions with negative profitability among the assortment, then in order to increase the level of their profitability, the price can be raised to a level that does not exceed market indicators. There is no possibility to increase the volume of output more for market reasons. As a result, profitability has become positive.

2. Next, we consider those positions that have the lowest contribution to coverage. KVP is the ratio of the contribution to cover fixed costs to sales proceeds. It shows what proportion of sales proceeds can be used to cover fixed costs and generate profits. The higher this indicator, the more attractive from a financial point of view, the production of this type of product. Therefore, our task is to increase the contribution to coverage ratio. This can be achieved by raising the price within the limits of market opportunities. As a result, the KVP also rises to 0.1459 and 0.1433.

3. Next, consider the positions with the highest CVP. These are the most profitable positions, so it makes sense to increase the volume of sales for them to the maximum possible (both in terms of production capacity and in terms of demand).

4. Next, we analyze the indicator of the operating leverage. This means that this is a position with the greatest risk, since if the break-even point is not reached, losses will be greater than for other names that also did not reach this point. In addition, for this position, the lowest margin of financial strength, therefore, it is necessary to increase production volumes in order to increase the margin of financial strength and reduce the likelihood of losses. Competitor analysis shows that the price can also be increased from $ 3.0 to $ 3.05. These measures will increase the margin of financial strength from 15.8% to 23.0%. And also to reduce operating leverage from 6.32 to 4.34 and increase profitability from 3.1 to 4.9%.

5. In conclusion, we consider the position with the maximum profitability. This position also has a high KVP, so you can increase its planned production volume. This will lead to a slight decrease in profitability from 15.6% to 14.8%, but will allow to maintain the planned sales volume.

As a result of the corrections made, we ensured an increase in the average profitability level from 6.37% to 8.02%. In addition, the margin of financial strength increased, the average level of operating leverage, and, consequently, the risk decreased, and the average CEP increased.

Also, in addition to the analysis given in the example, the following questions can be used as control questions:

Whether the sales volume is higher than the break-even level in general;

What goods are unprofitable, but have a high contribution to coverage ratio - for these items it is necessary to increase production volumes;

· What products are leaders in terms of revenue and profit share. Special attention is paid to these positions, since changes in their price or volumes will more than others affect the final figures.

So, the basic principles of assortment optimization are as follows:

1. It is necessary to shorten the positions (product names):

· With negative profitability, low contribution to coverage and low or falling demand;

· With negative profitability, high contribution to coverage and low demand (if this is due to general market trends and there is no way to independently influence demand using marketing tools), which does not allow increasing sales to the break-even point.

2. To increase the planned sales volumes by items:

· Having negative profitability, high contribution to coverage and stable or growing demand (as well as fluctuating demand that can be influenced using sales promotion methods) to the level of the break-even point;

· Having a positive profitability, a high contribution to coverage, a high level of operating leverage up to the highest possible level, driven by demand.

3. Reduce production volumes by items:

· With a clear tendency for demand to fall to the level of average profitability.

4. Increase the price by position:

· Having negative profitability, low contribution to coverage and growing demand until the break-even point is reached;

· Having a low contribution to coverage and negative elasticity of demand on the price (with a decrease in price, demand decreases).

5. Reduce the price by position:

· Having a positive profitability and a good level of demand with a downward trend in the presence of a stable price elasticity of demand (price increases - demand decreases).

In addition, in order for the assortment to be really optimal, one should take into account the limitations associated with production capacities, available working capital, and market demand for each product. It is not enough to focus only on economic indicators, but at the same time, decisions cannot be made based solely on marketing information. Only consideration of all factors in the system will make it possible to make an informed decision. Therefore, before making changes to the production program, it makes sense not only to carry out all the calculations (ideally in several versions), but also to discuss innovations with all stakeholders in the enterprise - heads of sales, marketing, chief engineer, chief technologist and other employees. You can also involve clients in the discussion, using, for example, surveys about their needs.

Conclusion

The presented analysis allows us to draw the following conclusions:

1. The total amount of the company's assets increased by 2,769,970 thousand rubles. (123.4 1%).

2. The increase in the total amount of assets occurred solely due to a significant increase in debt by 3,540,328 thousand rubles. (201.28%).

3. The amount of the company's working capital increased by 1 603 768 thousand rubles. (79.91%). This increase was mainly attributable to accounts receivable, with the main increase in the 2009 reporting year. At the same time, the total amount of reserves decreased by 94,585 thousand rubles. (7.08%).

4. The amount of non-current assets of enterprises increased by 1,166,202 thousand rubles. (490, 61%). This growth is due to a sharp increase in long-term financial investments by 825,754 thousand rubles, as well as an increase in investments in fixed assets by 180,583 thousand rubles.

5. During the period under review, the amount of equity capital decreased significantly by 770 357 thousand rubles. (158.62%). This decline was due to uncovered loss, with most of the decline in FY2009.

The analysis carried out on the basis of profit and loss statements of the company CJSC "Wild Orchid" for the period from 2007 to 2009 reporting year led to the following conclusions:

1. The company's revenue decreased by 59.84%, while gross profit decreased by 78.18%. Such an undesirable ratio for the enterprise was a consequence of the fact that the cost of goods sold decreased at a lower rate.

2. Profit from sales of the enterprise has significantly decreased by 162.69%. The decline in selling and administrative expenses could not compensate for the strong decrease in this indicator.

3. Taking into account the strong decline in revenue and the noted undesirable growth rates of costs, the company's net profit decreased by 1123.95%, despite a significant increase in other income and interest receivable.

The conclusions of the vertical analysis are as follows:

1. The share of the company's working capital is 72% of the total assets of the company, and every year it decreases.

2. The share of fixed assets is decreasing, despite the purchase of new equipment.

3. The share of short-term debts of the company has increased significantly and is at the level of one third of the value of the company's assets.

4. The share of long-term debts of the company is increasing and at the end of 2009 is 67.06%.

5. Equity capital of the company has a negative value and is

- 5.68% of the total amount of its liabilities, which indicates a very high level of riskiness of the company to become bankrupt.

Analyzing this data, one can come to the following conclusions:

1. The share of the cost of goods, products, works and services sold in 2009 is 70.41%, which is more than in 2007 (45.52%).

2. The share of selling expenses in 2009 is 40.65%, which is slightly lower than in 2007. At the same time, the share of administrative expenses increased from 0.22% to 0.25%.

3. The noted changes led to the fact that the share of profit from sales decreased from 7.24% to - 11.30%. This undoubtedly indicates a decrease in the efficiency of the enterprise's operating activities.

4. The final result of changes in the structure of the company's costs is a significant decrease in the share of net profit in revenue. In 2009 it was 49.86% against 1.64% in 2007.

According to the results of calculations based on the reporting data of CJSC "Wild Orchid", the value of the Z-account as of December 31, 2009 was 0.75. This suggests that there is a very high probability of imminent bankruptcy of CJSC Wild Orchid.

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