Advice 1: How to calculate value added

Typically, the goal of every company is to make a profit. When the company purchases raw materials from suppliers and produces a product, he will sell it at the new price or given added value. Thus, added cost is the cost that you just created new wealth.
To calculate the value added very easy if you know the procedure
You will need
  • Calculator
  • Paper and pen,
  • Data on the costs of the company for the purchase of goods
  • Data on costs of production
Determine the cost of purchased raw materials for production of new products or the cost of goods for resale. The rate is equal to the price at which the company buys goods or raw materials from suppliers. For example, a retail store purchased from suppliers of household appliances in the amount of 1.5 million rubles. This figure will be the priceu purchased product or raw material.
Determine the company's costs of production or the sale of goods. Such costs include staff salaries, electricity costs, transport costs, rent of premises, depreciation of equipment. For example, energy costs in retail shop $ 2 000. And the salary of employees is 400 thousand rubles. Then the sum of the total cost of the store is:
2 000 + 400 000 = 402 000
Add the sum of all costs to the cost of purchased raw materials or goods.
402 000 + 1 500 000 = 1 902 000 rubles.
Determine the size of the trading margin.In the above example, let the trading margin is 15%. It is charged on the cost of purchased appliances.
1 500 000 * 15% = 225 000 rubles.
Subtract the figure obtained in paragraph 3, the trading margin. The result is a value added. Added value = 1 902 000 – 225 000 = 1 677 000 rubles.In other words, any company will be interested in increasing added value, as this rate subsequently affect the final profit of the enterprise. In order to increase the added value necessary to reduce costs. As a rule, added to the cost subsequently charged a tax of 18%, payable in the budget according to the terms stipulated by the tax code.

Advice 2: What is the added value

Added value is part of the cost of the product, which was created in the organization. The difference between the cost of sold products and purchased goods and services.
What is the added value

The concept of value added

Value added (value added) is calculated as the difference between revenues and cost of goods and services purchased from outside organizations. The latter will include, in particular, the cost of raw materials and semi-finished products, repair, marketing, service, energy costs, etc.

Added is the value of the goods (or services), which increases the cost of the product during processing prior to sale it to the consumer. It includes payroll, rent, depreciation, rent, interest on loan, and profits.

For example, the company sold products in the amount of 100 thousand rubles For the production of these products it purchased raw materials on 30 thousand. and also the paid services of outside contractors on the 10 th Added value in this case is 60 thousand. (100 - 30 - 10) or 60% of the cost of the final product.

Western economists also share the notion of negative value added when additional processing not only adds value of the goods, but, on the contrary, reduces it. In a market economy the phenomenon of missing and applicable to the planned model.

The company added value is used in the following areas:

- salary payments (salary, bonus, compensation, contributions to extra-budgetary funds);

- paying taxes (except sales taxes and VAT);

- payment of Bank interest, dividends and other payments;

- investment in fixed asset acquisition, research and development and intangible assets;

- depreciation.

If, after all expenses incurred, there are any funds remaining, they are called retained value added (Value Added Retained). The latter can be negative when the added value is insufficient to cover all costs.

Gross value added

Distinguish between the concept of gross value added, which is calculated on the level of economic sectors. It is defined as the difference between output of goods and services and intermediate consumption. The summation of gross value added of all economic sectors constitutes in the amount of GDP production.

Intermediate consumption total cost consumption of goods and services to produce other goods and services. This, in particular, raw materials, purchased components and semi-finished products, fuel, electricity, etc.

Economic value added

Economic value added (EVA) is a method of evaluating the economic profit, which is used in the analysis of business efficiency from the standpoint of the owners. This company's profit from activities after tax and reduced investment in capital (at the expense of own and borrowed funds).

Formula EVA= profit - taxes invested in venture capital (total liabilities)*weighted average cost of capital.

Thus, the economic value added less profit (and therefore more losses) by the amount of payment for capital.
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