How to increase the profitability of

The most accurate assessment of the functioning of any company is profitability, which is not just a calculated, statistical parameter, but a complex socio-economic complex criterion. He describes, in contrast to the profit efficiency of financial activities of each individual economic entity. Profitability means profitability, profitability of the enterprise. It is calculated by comparing net profit or gross income to the resources used or costs.

Instruction

1. The profitability shows how profitable is the business, therefore, the higher the profitability index, the more effective the activity itself. Accordingly, the company should always strive for the highest performance, and the leadership needs to be defined ways of enhancing profitability.One of the conditions of effective activity of the organization is the market expansion of products offered by reducing the prices of manufactured goods. Also of special note are the internal factors of the company: increase production, reduce production costs, increase the return of assets.
2. The low profitability in the enterprise need to accelerate the turnover of assets. Return of equity capital can be improved by increasing in the total capital share of borrowed funds. At the same time, profitability of assets is higher when is higher and the profitability of the products will also be greater the yield of all non-current assets, turnover rate of current assets data, will be lower when the total cost per unit of output and costs by main economic elements (materials, tools).
3. It is impossible to consider abstractly and the influence of individual factors because the impact on the dynamics and level of profitability the totality of production and economic factors: the level of utilization of all production resources; the level of organization of management and production; structure of capital itself and the sources; quality, structure and volume of production; costs of goods and production; direction of use of net profit.
4. The profit can be directed on education, consumption funds and accumulation funds, contributions to the capital reserve of distraction to charity to expand the activities of the organization at the expense of own means. However, there is another alternative is to invest its own funds in securities of other larger companies, for example, to create an investment portfolio and correctly manage to have some time to get the income that you can invest in your company to improve competitiveness and financial condition of the company.