One of the key indicators characterizing the financial result of an economic entity is gross profit. The accuracy of the economic analysis carried out to determine promising directions enterprise development. In the article we will look at what gross profit is, how it differs from other types of profit, and we will study the calculation algorithm and how it differs from other results.

Gross profit concept

Gross profit refers to the difference between the proceeds from the sale of an organization's products, goods, works or services and the costs of their production or purchase. The main purpose of the gross profit indicator is to determine the rationality of spending labor, material and other resources of a legal entity.

As a rule, the reporting period for determining the amount of gross profit is month, quarter, half year and year. But for internal economic analysis and management accounting, depending on the company’s goals, gross profit can be calculated over a shorter period - a week, 10 days, a decade.

The difference between gross profit and other financial performance indicators

The gross profit indicator differs significantly from gross income, net, marginal and balance sheet profit.

Difference from gross income

Gross revenue (income) represents all the funds that a company received from its activities. This figure includes tax and other similar payments included in the price of assets sold. The amount of gross revenue depends not only on the price and number of sales, but also on the product range, labor productivity, demand and other indicators.

Gross profit refers to the difference between the amount of revenue from all activities and the expenses associated with them.

Gross and net profit

There is a main difference between these indicators. When determining gross profit, in contrast to net profit, the amount of taxes, fees and other similar payments is not taken into account. First, gross profit is calculated. After this, by subtracting the amount of taxes and fees accrued by the enterprise, the amount of net profit is determined.

Difference from contribution margin

The concept of marginal profit is closely related to the concept of variable costs, which are directly proportional to production output. These are materials, wages of workers engaged in production and sales. Marginal profit calculated as the difference between income and variable expenses organizations.

Its main difference from gross is that with the help of this indicator it is possible to determine the optimal production output in terms of volume and range, the most cost-effective option for production development. Gross profit characterizes the success of the company as a whole.

Balance sheet and gross profit: the same thing?

How to Determine Gross Profit

Gross profit can be calculated in different ways. The easiest way to define it is as the difference between sales revenue and sales expenses. You can calculate gross profit based on the amount of turnover. This does three things:

• turnover is multiplied by the estimated gross profit premium;
• the resulting value is divided by 100;
• The cost of sales is subtracted from the calculation result.

The estimated allowance is determined as follows:

• the trade markup as a percentage is divided by 100;
• to the obtained result the value of the trade markup is added as a percentage for reporting period.

Indicators involved in determining gross profit

The indicators taken into account when determining gross profit will differ slightly depending on the type of activity of the economic entity.

Indicator	Manufacturing plant	Trading enterprise
Sales revenue	Products	Goods and paid services
		Fixed assets and intangible assets
	Products, goods, services of structural divisions	Securities
	Securities
Expenses for	Raw materials, materials, tools	Purchase of goods
		Transportation of goods
	Administrative expenses	Salary and contributions to funds
	Depreciation	Renting retail premises
	Overheads	For advertising and storage of goods
	Transportation of products	Other articles

Gross profit as a financial reporting indicator

Gross profit is shown in the income statement on line 2100. The value of this line is calculated by subtracting their cost on line 2120 from sales revenue on line 2110. The gross profit indicator can have either a positive or negative value. If, as a result of the organization’s activities, a negative gross profit is obtained, we are talking about a loss, which is written without the minus sign in parentheses.

For example, Raduga LLC is engaged in sewing workwear. The organization's reporting for the previous period contains the following data:

Gross profit is calculated by subtracting its cost from sales revenue: 50,000 – 40,000 = 10,000 rubles.

Gross profit accounting: postings

Account 90 “Sales” is used to reflect gross profit in accounting. To calculate the gross profit for the reporting period, you need to compare the loan turnover with the debit turnover of this account broken down by subaccounts.

Account 90/9 is closed monthly by writing off the balance to account 99 “Profits and losses”. A debit balance on account 90/9 means that the financial result for the normal activities of the enterprise was a gross loss, while a credit balance indicates gross profit for the month. At the end of the year, subaccounts are closed on account 90.

Account correspondence		Contents of the operation
Debit	Credit
90/9	99	Write-off of gross profit
90/1	90/9	Sales revenue
90/9	90/2	Cost of sales
90/9	90/3	VAT
90/9	90/4	Excise taxes
90/9	90/5	Sales tax
90/9	90/6	Export duties

Let's look at the example of reflecting product sales and the formation of gross profit in accounting accounts. The main activity of the enterprise is the production of lungs metal structures(medals, orders, badges, metal fittings). In 2016, products were sold for 1,180,000 rubles (including VAT of 180,000 rubles). The cost of production was 700,000 rubles. In accounting, the accountant reflected the sale as follows:

• Dt62 Kt90/1 = 1180000 – shipment of products;
• Dt90/2 Kt43 = 700000 – write-off of production costs;
• Dt90/3 Kt68 = 180000 – VAT on shipped products;
• Dt90/9 Kt90/2 = 700000 – account closure;
• Dt90/9 Kt90/3 = 180000 – account closure;
• Dt90/9 Kt99 = 300,000 – sales result.

Gross profit, EBIT and EBITDA - what do they have in common?

When analyzing the financial condition and economic activities of an organization, EBIT and EBITDA indicators are used in world practice. In the Russian Federation they are used mainly by the largest resource extraction companies (Lukoil, Gazprom, etc.). Among domestic small and medium-sized businesses, these indicators have not received much widespread and practical application.

Their difference from gross profit lies in the special “cleaning” of this indicator and the calculation algorithm.

EBIT and EBITDA are determined in Russia somewhat differently than under IFRS. In domestic practice, EBIT and gross profit are identical. EBIT is the difference between sales revenue and direct expenses. In the Russian Federation, when calculating it, you need to take into account the amount of net interest, income tax reimbursement and the balance of emergency expenses and income.

• EBITDA = EBIT + depreciation.

Gross profit in economic analysis

Gross profit analysis is necessary to make important decisions management decisions and developing the organization's strategy for the future. On the basis of this value, profitability of sales, capital turnover and a number of others are determined. the most important indicators characterizing the activities of an economic entity. Conducting financial analysis, you can compare indicators obtained based on gross profit values ​​for the period:

• planned and actual;
• previous and present (actual).

It is relevant to compare the indicator for the enterprise with the average value for the industry, as well as actual values ​​with standard values.

Answers to pressing questions

Question No. 1. What is the difference between concepts such as gross income and gross profit?

Question No. 2. What factors affect gross profit?

The amount of gross profit depends on factors of two levels of internal nature:

• first level – sales income, interest receivable and payable, operating and non-operating profit;
• the second level is the cost of production, the structure of goods sold, sales volume and the purchase price of goods.

Gross profit is affected by product quality, correct pricing of goods, fines and economic sanctions. Gross profit is also influenced by external factors - geographical, political, natural. The management of an organization can easily influence internal factors. In relation to the influence of external factors, the choice of a flexible enterprise strategy capable of quickly changing is required.

Question No. 3. What transactions reflect the formation of gross profit in a retail trade organization?

When selling goods at retail, the accountant makes the following entries:

• Dt50 Kt90 – cash received for the Goods sold;
• Dt90/2 Kt41/2 – write-off of the cost of goods (sales price);
• Dt90/2 Kt42 – trade margin of goods sold (the posting is reversed);
• Dt90/3 Kt68 – VAT payable;
• Dt90/3 Kt44 – write-off of distribution costs;
• Dt90/9 Kt99 – financial result from sales.

Question No. 4. The trade organization has established the same percentage of trade margins for all product groups (20%). Revenue for the reporting period amounted to 1,500,000 rubles. How to correctly calculate the implemented enterprise overlay?

When a trade organization has established a single percentage of trade markup for all groups of goods, then to calculate gross income (realized overlay) you can use the method of determining by turnover (T), that is, by the total amount of sales revenue.

• First of all, I determine the estimated trade margin:
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Enterprise management depends on many factors - technical, financial, legal and social processes and phenomena, entrepreneurial intuition, experience of doing business in modern conditions market economy. At the core, any commercial activities lies the desire to obtain the maximum possible profit without loss of quality of products and with minimal risks for the enterprise. It is profit that is the final, final indicator of the efficiency of an enterprise, and it is profit that allows this enterprise to develop and optimize its industrial potential. In order to correctly and purposefully guide and regulate financial flows both within the enterprise and externally, you need to have a certain competence in the types of profit, its sources, classification and optimal ways its further use. One of these types is gross profit, which will be discussed in this material.

Gross profit (GP) and cost

If the concept of profit includes the difference between expenses and income from the sale of goods or services, then gross is a characteristic of the efficiency of production and financial policy enterprises. So, gross profit is the difference between revenue from a product or service sold and its cost. It is important to note that, unlike net income, VP does not exclude variable and operating costs and income tax deductions. In formal expression, the gross profit is obtained in this way: VP = B-C, where B is the revenue for the goods sold, and C is the cost of the goods or services produced. Gross profit is the profit from the sale of a product or service minus its cost.

In order to correctly and objectively obtain the volume of gross profit of an enterprise, you must first determine all the cost items that include the cost of goods, including variables that were not determined and calculated in advance. So, according to the most common definition, cost is the entire volume of resources, expressed in monetary terms, that was spent on the production and sale of a product or service. Thus, only by having a complete picture of all the costs incurred by production for the production and sale of a product or service can one objectively calculate the amount of gross profit for a certain period of time.

Factors Affecting Gross Profit

Like any other financial category, LP is influenced by a number of factors. Conventionally, they can be divided into factors that depend on the activities of the entrepreneur and independent factors. The first category includes the dynamics of growth in production volumes and sales of products, expansion of the range, work to improve the quality and competitiveness of products, cost reduction, optimization labor productivity and coefficient useful action each unit of human resources, maximum use of production assets and capacities, regular analysis and, if necessary, revision of the company’s marketing strategy. The second category includes factors that cannot be influenced by business entities: geographical, natural, environmental or territorial conditions, legislative regulation, changes in government strategy in supporting business, international and global changes regarding the resource and transport provision of the enterprise.

If the second category of factors obliges the choice of a flexible and rapidly changing management strategy that would ensure the continued functioning of the enterprise without, or with minimal losses and costs, then the management of factors of the first category is quite within the capabilities of experienced and competent enterprise management.

By increasing the volume of production and sales of products, and thereby increasing trade turnover, the company contributes to the growth of its gross income; a directly proportional relationship operates here. Therefore, great importance should be attached to maintaining the pace and volume of production at a stable level, avoiding a decrease, as this will inevitably entail a negative impact on gross income. It is important to note that unsold product balances, which could generate income, but for one reason or another become unnecessary ballast for the enterprise, have an extremely negative role. Some managers sometimes use a strategy of discounts, additional goods at a reduced cost, or barter exchange of balances in order to maximize their implementation and return the expended capital to the working capital. Most often, such marketing steps do not bring gross income, but if positive result and there is, then minimal.

It is very important to influence the cost of production - the use of innovative technologies in production, the search for maximum low ways delivery of products to the buyer, the introduction and use of alternative and economical energy resources ultimately helps to reduce costs and significantly affects the gross profit of the enterprise.

One of the most important factors worth noting is the pricing policy of the enterprise - high competition in a modern market economy constantly stimulates the manufacturer to revise pricing. Here two categories of factors intersect, because state antimonopoly policy interferes with the pricing policy of an enterprise, on the one hand promoting healthy competition in the market for goods and services, and on the other hand, preventing the free setting of prices for a particular product. But you should not strive to constantly reduce prices to increase the company’s turnover - a stable and confident exchange rate will help you stay afloat, and this will in any case be better than a feverish increase in volumes in order to maintain a stable income.

Analysis of product profitability makes it possible to determine which product is worth making the maximum bet on, and the need to produce which products should be reduced or even limited. After all, it is obvious that the turnover of profitable products gives maximum gross income, thereby increasing the net profit of the enterprise.

During the operation of any production, over time, problems arise. inventories, which are no longer used or their use is inappropriate. This may arise due to illiterate management, or due to objective factors. In this case, in order to avoid losses that may arise due to the fact that the ownership of these assets and their further sale will be much lower than the costs of their acquisition, it is worth taking measures to sell them. The money received from the sale of fixed assets will also be part of the gross profit of the enterprise.

Another source for increasing gross profit may be non-operating income - incoming rent, interest and dividends on shares or deposits, fines and sanctions in favor of the enterprise and other sources.

Optimal distribution of gross profit

So, having sold products and received a certain amount of money, you need to use it correctly and constructively, without forgetting any of the expense items. Imagine a conditional pyramid, at the top of which is the total volume of gross profit, followed by various sources of expenses: rent for construction or production facilities, interest payments on existing loans, various charitable contributions and foundations, all kinds of taxes, and most importantly, net profit. Further, the net profit is also distributed into several groups - environmental funds and payments, selection, preparation and training of human resources, social funds for the creation social infrastructure both enterprises and the state as a whole, personal income of enterprise owners, and reserve cash savings.

The strategy of paying wages to staff has a good effect when they receive not only a fixed fee for their work, but, like the owner of the enterprise, a part of the income from the final gross income of the enterprise. Such payments are of a bonus nature and, as a rule, are made irregularly, most often at the end of the year or reporting period.

It is worth noting that all types of payments are divided into two categories - those whose minimum amount is fixed, and those whose distribution depends on the managers and owners of production. The first include various types payments for rent, interest, loans. The second category is more specific, since the volume of payments in charities or on social needs depends on the decision of the management apparatus, and therefore may not always be objective and useful. An increase in part of the businessman’s own profit, and therefore a decrease in expenses for other items, may further negatively affect the growth dynamics of the enterprise. This is primarily due to the human factor, which plays a vital role in the production process - a full social package for staff, developed social support and infrastructure significantly affect the level of labor productivity.

Thus, an objective and comprehensive approach to the distribution of gross income of any enterprise makes it possible not only for its subsequent development, expansion of production capacity and strengthening of personnel capabilities, but also contributes to a further increase in the net income of the enterprise.

Gross revenues and profits are used to develop a business's budget of income and expenses for the upcoming financial year. These indicators reflect the costs associated with the production cycle. Gross profit does not take into account the amount of administrative or selling expenses, so it can be used to make forecasts in the short and medium term.

What is gross profit in simple words

To determine this indicator, it is necessary to know the exact amount of the organization’s income and the cost of products sold. Gross profit is the difference between revenue receipts and expenses included in the actual cost of production. When calculating the total value, there is no need to separate out tax liabilities.

The indicator is formed by subtracting from the total income for a certain period of time such expenses as:

• production costs (payment of the cost of materials and raw materials, maintenance equipment used);
• payment of bills for consumed electricity, water supply;
• wages.

Gross profit is the result of the company's activities, which is calculated with the frequency established by the accounting policy. Its value can be influenced by external and internal factors. What does the concept of gross profit of an enterprise include:

• income that was received after the sale of manufactured products;
• receipt of funds for services rendered or work performed;
• resources generated by logging farms;
• gross profit is not only revenue from main activities, but also profitable transactions under contracts for the sale of equipment and other own assets of the organization;
• amounts received into the company's accounts for shares purchased from it.

If gross profit has decreased, this indicates a decrease in the level of profitability of production, a drop in the level of labor efficiency, or the use of incorrect logistics. Preventative measures will include actions to reduce costs, promote goods in the target segment, and launch additional capacities to reduce average costs.

Gross profit and gross margin are different concepts. When calculating profit, variables are subtracted and partially fixed costs. Margin is characterized by focusing only on variable costs. Gross and net profit differ by the amount tax obligations and fees payable. Net profit is calculated on the basis of gross profit by subtracting accrued taxes from it.

The statement that book profit– this is gross profit, incorrect. These terms cannot be identified. The value of gross profit can be found from account card 90. Balance sheet or taxable profit (gross profit is not used as a tax base) is reflected in accounting in the amount of account balance 99.

Gross profit (loss) in accounting and reporting

Summarizing the gross type of profit occurs through a comparison of the amount of debit and credit turnover of account 90, taking into account the breakdown of transactions by subaccounts. The resulting balance must be written off to account 99. The financial result can be a loss or profit (and gross profit - the difference between the debits and credits of one account). When a debit balance is formed at the end of the month, a loss appears, while credit balances indicate the profitability of the project. If gross profit is received, the posting will be in the format D90.9 - K99. At the end of each reporting year, all subaccounts under account 90 are closed.

When reflecting profit in reporting documents, negative indicators are entered without the minus sign. To indicate the unprofitability of an activity, the number is placed in parentheses. Gross profit is not shown in the balance sheet - there is no line for this. The report form requires entering data only on the part of the profit remaining undistributed as of a specific date.

Gross profit does not appear on the balance sheet, but it can be seen in the report on Form 2. The convenience of this form is that it makes it possible to trace the chain of calculations. Gross profit in the income statement is shown on line 2100. The document template with codes clearly demonstrates the procedure for calculating the indicator using lines 2110 and 2120.

Gross profit of the economy and enterprise: calculation formulas

The degree of efficiency of production cycles through profitability can be assessed on the scale of one company or the country as a whole. In the latter case, the gross profit of the economy is used; the formula involves finding the difference between the value of GDP and the total costs of producers for the manufacture of products. The resulting total shows what profit residents received or what losses they incurred as a result of the sale of their goods.

What is the gross profit of an enterprise - the essence of the concept can be traced by the formula for calculating it:

Monetary valuation of products sold – Cost of goods sold – Production costs.

According to the report of Form 2, calculations are carried out according to the following scheme:

• Line 2110 – Line 2120.

The calculated gross profit does not show the real income of the business entity, but the basis for analyzing the structure of production resources.

- this is a parameter that displays the difference between the income received by the enterprise and the cost of goods (services) sold, but without deducting income tax.

Gross profit- This total income company, which was received over a fixed period of time. It takes into account the profit from all types of activities of the company (both production and non-production areas) minus production costs. The calculated figure is recorded in the balance sheet.

Gross profit of the economy is an indicator that takes into account the difference between GDP and producers’ expenses associated with paying for imports, net taxes and wages employees. This parameter characterizes the income or loss received by the company from the production of products, before taking into account profits from property.

Gross Profit Analysis

To analyze gross profit, horizontal and vertical analysis of changes in income is done. In this case, all the results are entered into a special table, after which they are compiled and analyzed.

From the above example, it can be seen that the company’s activities are very successful. During the reporting year, we managed to achieve a positive balance in almost all indicators, except for non-operating profit (the latter decreased by almost three thousand rubles). The main growth is noticeable in such indicators as other operating income, and so on, if not for the increase in operating expenses and the increase in interest payable, then gross profit the company's price would be much higher.

Gross profit and its component are influenced by several main factors:

1. External factors:

Natural, transport, socio-economic conditions;
- cost of production resources;
- level of development of foreign economic relations and so on.

2. Internal factors can be divided into two types:

- first order factors– income from the sale of goods, interest receivable (paid), other and other unrealized income or expenses of the company;
- second order factors– products, structure of goods sold, sales volumes and prices set by the manufacturer.

In addition to those listed above, to internal factors It is possible to include nuances that are associated with violations of discipline during the operation of the enterprise - errors in setting prices, low quality products, violations of working conditions, economic sanctions and fines imposed.

Both categories of factors, both first and second order, directly affect the amount of gross profit. At the same time, 1st order factors are components of gross income, and 2nd order factors have a direct impact on sales income and, accordingly, total value company profits.

In order to further increase the company's income, the following measures should be implemented:

Application of LIFO methodology in inventory valuation,
- tax reduction through the use of tax benefits;
- timely write-off of the company’s debts that are classified as bad;
- optimization of company costs;
- effective implementation pricing policy;
- using shareholder dividends to optimize the company’s equipment and improve product quality;
- formation of standards that allow control.
Effective management gross profit and its application is well discussed in the flowchart below

Components of gross profit

Profit is one of the main results of a company’s activities, which covers the needs of not only the company (in particular), but also the country’s budget in combination with other types of business. That is why it is so important for a businessman to determine not only the size, but also the composition of income. In this case, the total amount of profit of the company is called gross.

The main factors for the growth of gross profit include: increasing production volumes of certain products (services), reducing the cost per unit of goods, improving quality, expanding the range of products, efficient use everyone production factors available to the company. Particular attention should be paid to the growth of labor productivity, on which total production volumes depend.

There are also factors that do not depend on the “internal” work of the organization - features of state policy in the field of price regulation, the influence of transport, natural or technical specifications on the processes of selling products or their production. At the same time, all factors, both external and internal, influence the formation of gross profit.

Composition of gross income is the total profit of the company received in the process of doing business. The main part of gross profit is income from sales commercial products, calculated using a simple formula - the total amount of revenue from the sale of goods (providing a service or performing work) “minus” excise taxes, VAT (value added), general for production and sales. At the same time, income from the sale of commercial products is the basis of gross profit.

In addition, in composition of gross income usually included:

Profit from the sale of other goods and services of a non-commercial nature. This may include funds received from automobile, rural or logging farms that are on the company’s balance sheet;
- profit from the sale of fixed assets and other material assets organizations;
- non-operating profit taking into account the deduction of non-realized expenses. Essentially, this parameter displays the results of all company operations outside of the sales of manufactured products;
- income from the sale of company assets (shares, bonds), as well as derivatives instruments that are not in free circulation on the organized market.

Almost 95% of the company's gross income comes from the sale of commercial products. That's why it's so important to pay special attention to it.

In addition, the above factors, as a rule, affect the income from sales of products manufactured at the enterprise (services provided). However, some of them require the most detailed study.

On income received by selling goods, is influenced by changes in the balances of untimely sold products. The more such balances, the less the company's income. At the same time, the volume of unsold goods largely depends on a number of reasons. The most common is the production of goods in volumes greater than the company can sell. The peculiarity of unsold balances is that because of them the share of more valuable products may increase. As a result, volumes are not products sold will increase. To eliminate such problems, the manufacturer must make every effort to reduce the volume of residues, both in total and in numerical terms.

The amount of income from products sold is influenced by several main factors:

- change in the volume of production of a product to its sales. The more actively a product is sold on the market, the higher the company’s profit, and vice versa. There is a direct relationship here;
- change in product cost level. Unlike production volumes, which directly affect the company's income, increasing costs have the opposite effect. Here, the higher , the lower the manufacturer’s profit, and vice versa. That is why, when analyzing product costs, it is so important to reduce this parameter to a minimum. For this purpose, entire sets of measures are developed, plans are drawn up, cheaper raw materials are selected, and so on;
- cost of production. When setting a price, the manufacturer focuses on several main factors - the market value of such products, the cost of manufactured products, the level of demand for the product, its competitiveness, and so on. On the other hand, the cost can be influenced by factors independent of the company - this is the policy of monopolists in this area, and so on. At the same time, the price level largely depends on the timely modernization of production, its technical improvement, and so on;
- changes in the structure of manufactured and sold goods. The larger the share of a profitable product, the more income it will receive. Conversely, if the volume of low-profit products is too high, this may lead to a decrease in income.

Another important one gross profit component– income from the sale of other goods and services of a non-commercial nature. The share of this indicator in the gross profit is only a few percent. At the same time, the results of activities from other sales can be either with a positive or negative balance. Enterprises trade organizations and agricultural farms that are on the balance sheet of the manufacturer can bring not only income, but also losses. As a result, your gross profit will vary.

Income from the sale of fixed assets and other property is also included in gross profit. In the process of conducting business, a company may develop surplus material assets, for example, due to changes in production volumes, problems in the supply system, failures in the sale of goods, and so on. As a result, the revenue received will be much lower than the purchase price. Consequently, selling excess goods can bring not only income, but also additional costs for the company. In relation to the sale of excess fixed assets, the income will be calculated as the difference between the cost of selling the product and the initial price of the assets, which does not take into account the inflation growth index.

Unrealized profit of the company minus unrealized expenses - although insignificant, it is part of the gross profit. This indicator may include exchange rate differences on foreign currency accounts in case of transactions in foreign currency. Since 1998, such profits have also included the investor’s income from the execution of a production sharing agreement. In addition, unrealized profits include income from the provision of property for rent, equity participation in the life of other companies, payments on securities, and so on.

Calculation of gross profit

All activities for calculating gross profit must be carried out before calculating taxes. When filing Form C-EZ, gross income will be determined in addition to additional income, which will be discussed below.

In this case, the calculation should be made taking into account the type of enterprise:

1. Companies engaged in trading goods– category “Businesses that sell products”. To calculate gross income, it is necessary to determine the amount of total net profit. This is done according to form C (point three). To determine net revenue, it is necessary to subtract from the total amount of offsets all discounts and refunds during the company's operation. After this, the cost of products sold is subtracted from the amount of net income (term three) (displayed in line 4). The resulting difference is the company's gross profit.

2. Companies that sell services. If the enterprise belongs to the category “Businesses that sell services” and is engaged in the provision of services (without selling goods), then the gross income will be equal to the net revenue of the enterprise. The calculation in this case is made by deducting the total amount of returns and discounts from the total gross income. For the most part, enterprises that provide only services produce precisely according to this simplified scheme.

Before you start calculating gross profit, it is important to pay attention to the following aspects:

- gross revenue. At the end of each working day, it is necessary to check that everything related to credit and cash receipts is correctly reflected in the reporting. In this case, the volume of receipts can be tracked using established cash registers. You also need to open a separate account with a banking institution and learn how to use invoices;
- collected sales tax. It is important to ensure that the reporting correctly indicates the amount of tax collected. The point is this. If buyers are charged local and state sales taxes (which the government collects from the seller), then all funds collected must be included in the total gross income;
- inventories(the indicator is estimated at the beginning of each current year). This parameter is compared with the price of the final profit for the previous year. If everything is normal, then the indicators should be identical;
- purchases. If in the course of business he buys any goods for personal use or transfer to family members, then the amount spent should be deducted from the cost of products sold;
- end-of-year inventories. Make sure that all inventory in the enterprise is kept in compliance with rules and regulations. In this case, a prerequisite is the use of the correct price formation method. Just an inventory form is sufficient to confirm all available inventory. Such forms can be purchased at the store. Their peculiarity is the presence of special columns in which data on the quantity, price and cost of each product is entered. On the form there is a place to record the data of the person who evaluated the goods, made calculations and checked their correctness. It is these forms that provide proof that the inventory was carried out correctly and without serious violations.

3. Checking the calculations performed. If the company is engaged in retail or wholesale sales, then recalculation will not take much time. All you need to do is divide gross income by net profit. The resulting figure is expressed as a percentage and shows the difference between the cost of goods sold and the nominal value.

4. Additional sources of gross profit. If the company receives income from sources that are not related to its core business, then the income must be recorded on line number 6 of Form C and added to gross income. The result of the summation is the gross income of the entrepreneur. If you use Form C-EZ for reporting, then profit should be recorded in line 1. For example, such income can include profit from offsets, tax refunds, transactions with scrap metal, and so on.

Gross profit tax

Gross profit- this is the amount of income from all transactions related to the sale of goods (services or works), including the sale of fixed assets, the sale of other property and profits from non-sales transactions. The total amount of expenses for these operations is subtracted from the resulting indicator.

Profit from the sale of products is the difference between the company’s total income from the sale of goods excluding excise duties and VAT (value added tax), as well as expenses on sales and production.

Companies that operate in the foreign economic sphere must deduct export duties when calculating. In addition, benefits provided to companies by law are also not subject to taxes.

To pay taxes, gross income may be reduced by the amount:

Profits from equity participation in the work of other companies. This does not include profits earned outside the country;
- profit in the form of dividends received on shares, as well as profit in the form of interest received by holders of state assets at all levels (including constituent entities of the Russian Federation and local governments);
- income from intermediary transactions. This is relevant if the income tax, which is deducted to the country’s budget, differs from the percentage that is deducted to the budget of the constituent entity of the Russian Federation;
- income from insurance operations (the condition is similar to the previous one);
- income from the sale of agricultural or hunting products;
- income from banking operations.

When calculating tax, companies can count on certain benefits. In particular, it is reduced by the amount:

Contributions to charity (no more than 5%),
- deductions for financing capital investments industrial purposes and housing finance;
- contributions for the restoration or maintenance of social facilities;
- deductions aimed at conducting research or design work, as well as those transferred to funds technological development or basic research.

Taking into account all the benefits listed above, the taxable amount can be reduced by more than half.

The income tax rate is reduced for companies that employ more than 50% disabled people. In addition, in the first two years no income tax is paid by enterprises operating in the following areas activities – production of products, production and processing of agricultural products, production of consumer goods, production of medicines, medical equipment, construction of social, industrial, environmental and housing facilities. Benefits apply to those companies whose revenue from the above-mentioned activities is at least 70%

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The firm's gross profit allows managers to analyze the work of divisions of organizations with an extensive network of production or retail outlets. Let's look at how to calculate and compare this indicator.

You will learn:

• What does the term "gross profit" mean?
• What factors influence gross profit.
• What is taken into account when calculating gross profit.
• How to calculate gross profit margin.

The value of VP is interconnected with the development of production; it does not always truly reflect the picture of the effective operation of the enterprise. It does not include, for example, logistics and marketing costs. Therefore, when forming the final budget, calculating one VP indicator will be too little.

Calculation of gross profit: formula, methods, examples

What affects the revenue of an industrial enterprise:

• technologies and specifics of goods production;
• fixed assets;
• intangible assets;
• issue of bonds and shares;
• sold products (services) of other structural divisions included in the general balance sheet (subsidiary farms, vehicle fleet).

The cost of such enterprises includes:

• cost of resources, raw materials, supplies and fuel;
• remuneration of employees;
• management costs;
• depreciation of fixed assets and intangible assets;
• overheads;
• delivery and logistics costs.

What determines the revenue of organizations selling goods:

• purchase price of products;
• paid services (delivery, warranty service and after-sales services);
• enterprise assets ( securities and software).

The cost of commercial firms includes the following elements:

• cost of purchased products;
• delivery costs;
• remuneration of company employees;
• rental price of warehouse premises and retail outlets;
• product storage and preparatory work;

To determine gross profit, two parameters are used: revenue and technological cost of the entire volume of production (minus commercial and administrative costs). There are other methods of calculation. Let's name the most important of them.

Calculation of gross profit

Calculation for trading companies

Calculation of trade turnover

This technique is practiced by retail enterprises when a single markup has been adopted for all products they sell. Sometimes it is more convenient to calculate this indicator based on the company’s turnover figures. Trade turnover is the amount of revenue including VAT. To do this you should:

In addition, you can use another formula:

Balance calculation

As a rule, to calculate gross profit using the formula, indicators from the organization’s balance sheet, as well as a report on its financial activities. This method is suitable for companies with simplified taxation system (simplified taxation system). Then the calculation algorithm looks like this:

Line 2100 = line 2110 – line 2120, where:

line 2100 – gross profit (taken from the balance sheet);

line 2110 – the amount of revenue of the enterprise being studied;

line 2120 – technological cost.

Example 1 (on balance)

The manufacturer OJSC Intensiv produces and sells equipment for agriculture. According to financial work enterprise over the past few years, its financial results are:

Indicator name		2016	2017
Sales revenue, thousand rubles.
Cost of production, thousand rubles.

Calculation of gross profit of the enterprise OJSC "Intensive":

PR shaft 2016 = 140,000 – 60,000 = 80,000 (rub.)

PR shaft 2017 = 200,000 – 80,000 = 120,000 (rub.)

Calculations show that over the year the organization increased its income by 40,000 rubles, therefore, this year it will continue to implement the chosen policy while simultaneously searching for new areas of development.

Example 2 (for trade turnover)

The Yagodka grocery store has set a 35% markup for all products. Total revenue for the year reached 150,000 rubles. (including VAT).

The estimated premium is equal to: P(TN)=35%:(100%+35%)=0.26. In this case, the amount of the realized trade overlay (surcharge) will be 0.26 × 150,000 rubles. = 39,000 rub.

An example of gross profit calculation and analysis of the data obtained

Let's give examples of calculating gross profit for two enterprises and analyze the result. The Voskhod plant bakes a wide range of bakery products, has production facilities in the Moscow region and trades only in the capital region. The Zarya enterprise is located in Samara, has a similar specialization, but differs assortment .

Table 1. Gross profit of the Voskhod organization for the first half of 2016

Name / Month							Total
Revenue, thousand rubles
Gross profit, thousand rubles.

The table shows that gross profit is steadily increasing every month and from 2,000,000 rubles. increased to RUB 3,300,000. Monthly growth factors are cost and revenue. In just 6 months, the company earned 23,400,000 rubles, while the cost of sales amounted to 7,600,000 rubles, VP - 15,800,000 rubles.

It turns out that on average the company’s gross profit every month reaches 15,800,000/6 = 2,600,000 rubles. This amount income is able to cover other expenses: administrative, sales costs, credit interest.

If we compare only the absolute values ​​of VP, it is possible to analyze trends over the course of six months, but it is not easy to note the quality of the company’s work results. In this regard, we calculate the relative parameter, that is, gross profit margin as its ratio to the organization’s revenue. For all six months it was 67.4%, and every month this figure is approximately the same. But still, compared to the average for the half-year, in March-April there is a decrease, and in May there is an increase in the profitability of VP.

The determining factors for these values ​​are cost and revenue. As a result of the analysis (it is not included in this article), it was found that pilot sales of completely new products started in March. This caused an increase in revenue in this particular month, including subsequent ones. For this type of product, the cost of sales in March-May was increased, since the enterprise did not qualify for the scale of purchases in accordance with the contractual supplies at preferential prices for materials and raw materials. The situation changed in June.

Let's calculate the gross profit for the Zarya plant and analyze what happened.

Table 2. Gross profit of the Zarya organization for the first half of 2016

Name / Month							Total
Revenue, thousand rubles
Cost of sales, thousand rubles.
Gross profit, thousand rubles.
Gross profit margin, %

The second table shows that Zarya’s revenue is significantly lower than that of the Voskhod enterprise.

Average monthly revenue is RUB 1,900,000. (11.15:6). At the same time, during the first half of the year, differences in dynamics are visible. From the beginning of the year to April, revenue grows, and from May it begins to decrease. The same thing happens with gross profit. The average monthly total profit of the plant is 1,200,000 rubles. (7,1:6). From the position of the Zarya company, is this not enough or too much? This question can be partly answered after calculating the profitability of the VP. Her average value is 63.7%.

The enterprise carries out accounting according to the method of accrual of income (expenses). The shortened method was chosen for costing. Almost 64% of a firm's gross profit can be allocated to selling, administrative and other expenses.

This example demonstrates that over the course of six months, the absolute values ​​of EP showed unconditional dynamics, however, the calculation of relative characteristics revealed additional changes. So, despite the June fall total profit, there is an increase in the profitability of VP over the same period. The determining factors for these changes are cost and revenue. As a result of the analysis (it is not included in this article), several justifications were found.

In February, the company purchased cheaper products (sugar, flour), and the recipes of some of the product range changed. In the following periods, the previous supplier returned, which was facilitated by the poor quality of cheap raw materials. The decrease in VP profitability in May was also caused by a change in production costs. The year before last was marked for the company with the introduction of a modern KPI system in order to motivate staff. And already in May, based on the results of the first quarter, the first bonuses were paid to employees of industrial lines. There was an increase in wages for production workers and an increase in the cost of sales.

Later in June, the plant lost some points of sale of goods and was unable to find replacements for them in advance. Revenue immediately fell, and the trade profile changed (sales of products with higher costs and lower margins). In general, there has been an increase in the cost of sales along with a decrease in the profitability of total income.

When comparing two examples, it is clear that the gross profit of the Voskhod company has a more stable average dynamics (RUB 2,600,000). The average VP of the Zarya enterprise is almost half as much (only 1,200,000 rubles). Its dynamics in the first half of the year are unstable, the market situation is more difficult or there is a lack of resources to regulate the current situation.

The average monthly revenue amounts are also different: for Zarya – 1,900,000 rubles, for Voskhod – 3,900,000 rubles. It should be noted that a selective comparison is only absolute values not entirely true. If the Zarya plant can increase its trade turnover in order to catch up with Voskhod in terms of revenue, will it be just as economically efficient? The answer to this question will be given by the VP profitability indicator. On average, for the Voskhod enterprise it is 67.4%, and for Zarya it is slightly lower - 63.7%. A difference of 4% can be decisive. Which means that Voskhod is currently more successful. He works and sells much more efficiently, maintaining the company's gross profit at a constantly high level, unlike the Zarya company.

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What to consider when calculating gross profit

Any steps prior to calculating gross profit must be completed before taxes are assessed. When completing Form C-EZ, the total income will be counted along with the additional income.

Calculations are carried out taking into account the types of enterprises, namely:

• Companies selling goods, belong to the category Businesses that sell products. To determine gross income, you need to find the amount of net total profit. To do this, we use form C (point 3). To calculate net revenue, you should subtract all returns and discounts in the organization’s activities from the total amount of offsets. Then from net income (3rd line) we subtract the cost of goods sold (4th line). The final difference will be the company's gross profit.
• Companies selling services, are included in the Businesses that sell services category and provide only services (excluding the sale of goods). In this case, gross income is identical to the organization's net income. The calculation is made by subtracting the total of discounts and returns from gross income. Basically, enterprises specializing only in services calculate profits using this simplified scheme.

• Gross revenue. Every day at the end of the working day, you need to make sure that all data related to financial and credit receipts are correctly reflected in the reporting. The volume of receipts is controlled using existing cash registers. In addition, you need to open a separate bank account and learn how to work with invoices.
• Sales tax collected. The main thing is to make sure that your reports correctly indicate the amount of tax collected. Its essence is as follows. When state and territory sales taxes are collected from buyers (the government collects them from the seller), all funds claimed are added to the total gross income.
• Inventory(analyze the indicator obtained as of the beginning of the current year). It is compared with the amount of final gross profit for the past year. In a normal situation, the indicators will be the same.
• Purchases. The amount spent on goods purchased by the entrepreneur in the course of his business for personal use or for family members is deducted from the cost of goods sold.
• Inventory at the end of the year. Check that the accounting of the enterprise's reserves is carried out in compliance with the rules and regulations. An indispensable condition To do this, you need to choose the right pricing methodology.

To confirm all inventory on hand, a standard inventory list, forms of which are sold in specialized stores, is sufficient. The form contains columns for indicating the quantity, price and value of each type of goods. The form provides space for entering information about the employee who assessed the goods and made the calculations, and then checked their accuracy. These forms are proof that the inventory of inventory items was completed correctly in the absence of serious errors.

Download form act of inventory of inventories in transit , you can at the end of the article.

• Checking completed calculations. For organizations specializing in wholesale sales or retail, the recalculation is done quite quickly. All you need to do is find the ratio of gross income to net profit. The result obtained as a percentage reflects the difference between the cost of goods sold and the nominal price.
• Additional sources of VP. If the firm's gross profit is derived from sources other than its core business, the income figure is entered on line 6 of Form C and added to gross income. The total amount will show the total income of the entrepreneur. When Form C-EZ is used for reporting, profit is shown on line 1. For example, this type of income includes revenue received from tax refunds, offsets, commercial transactions with scrap metal, etc.

The practitioner tells

Gross profit in factor analysis of income statement

Artyushin Vladimir,

Vice President of Finance FS GROUP1

Conducting a factor study of profit and loss statements will help to estimate the exact amount by which net profit has changed due to certain reasons. Let’s say that in order to determine the losses of an enterprise’s VP due to a decrease in revenue and a decrease in sales profitability, it will first be necessary to calculate what the total profit could have been while maintaining sustainable profitability at last year’s level.

The difference between this conditional VP and the profit of the previous year will illustrate how much profit (VPv) in monetary terms the company lost (earned) as a result of a decrease in revenue.

The gross profit formula for calculation is:

VPv = VPusl – VPo, Where:

VPusl – conditional VP that could be received by the organization while maintaining last year’s profitability (this year’s revenue, last year’s profitability), rub.;

VP – last year’s gross profit, rub.

Using a similar formula, you can determine how a change in sales profitability affects the amount of total profit (VPr):

VPr = VP – VPusl, Where:

VP is the annual gross profit of the company for the reporting period.

What affects gross profit?

The components of gross profit and its size are affected by a number of important factors, listed below.

External factors:

• transport, environment, socio-economic conditions;
• level of foreign economic relations;
• cost of production resources, etc.

Internal factors can be divided into two types:

• first order reasons, which includes income from the sale of goods, operating profit, interest payable (or received), other non-operating income or expenses of the enterprise;
• second order reasons include the cost of production, the composition of goods sold, the scale of sales and prices set by the manufacturer.

In addition to these reasons, internal factors include cases caused by violations of labor discipline during the work of economic entities (incorrect pricing, poor product quality, violations in labor organization, financial sanctions and the application of fines).

Both types of factors (first and second order) directly determine the amount of gross profit. First-order reasons include components of gross income; second-order circumstances directly affect sales revenue and, as a consequence, total amount company profits.

For further prosperity and increased profitability of enterprises, it is necessary to take a series of measures, namely:

• apply the LIFO (Last in First out) method to evaluate resources;
• reduce taxes due to the transition to preferential taxation;
• promptly write off the organization’s debts that are recognized as bad;
• optimize enterprise expenses;
• maintain an effective pricing policy;
• let in shareholders dividends to modify production equipment and improve product quality;
• develop standards for exercising control over intangible assets.

How is gross profit margin calculated?

In the process of general analysis of the profitability of organizations, the characteristics of net and operating profitability are often used, but technical methods compilations are only derivatives of gross profit. In this case, the main expense items (often with a maximum share) are applied already at the stage of calculating gross profitability.

Gross profit margin (hereinafter referred to as GPR) is the rate of return (or percentage) on expenses associated with the production and sale of products. It is calculated using the generally accepted standard formula without using other modified calculation methods.

Compound this indicator establishes the dependence of its value on the business area. For example, enterprises providing services (medicine, consulting, information and communication technologies) have a higher RVP than trade organizations. This means that the VP profitability index is essentially useless for cross-industry analysis. But when comparing economic entities specific area activities, this parameter is an excellent way to assess their competitiveness. Especially if it is done factor analysis coefficient of industrial enterprises. All major efficiency and growth programs are based on gross margins: raw material costs, scrap rates, labor productivity, marketing strategy(sales cost) and other important components.

When calculating gross profit margin, serious attention should be paid to the Cost of Sales component. Figures taken from a similar line (No. 2120) of the F-2 accounting report (financial performance report) in some cases are completely unacceptable. First of all, the cost of sales must include expenses taking into account the scale of sales, that is, variable or semi-variable costs. This includes the cost of materials, wages to production workers (with all fees and taxes), additional costs (repair and depreciation of equipment, payment for electricity, and other items).

At the same time, some commercial expenses related to sales are also included in the cost price. A good example such expenses - bonuses to sales managers for the volume of goods sold.

It is taken into account in a completely different way depreciation. Since accountants have a particular preference for the linear method of calculating depreciation expenses, RVP calculations are most often distorted. When a company shows an obvious jump in revenue growth, accounting for depreciation unchanged will artificially inflate the gross profit margin when sales increase, and exactly the opposite will happen when they decrease. A similar situation arises with the rental of industrial premises (or equipment) and other costs that, by source or type of accounting, cannot be planned due to the scale of production and sales.

The correct calculation of the RVP is of cardinal importance for the formation of prices in a highly competitive market. Only reliable information about this indicator allows the owner (management) of a business to see the optimal selling price, taking into account the required profitability.

How is the firm's gross profit distributed? She compensates fixed costs, debts, interest on loans, payment of taxes, payment of dividends. That is why the analysis of the dynamics of an organization’s profitability should be carried out in accordance with the value of the RVP. Profitability indicators are not so high level are not entirely suitable for this purpose due to the increased influence in the calculation of the number of factors and the accounting strategy used.

When evaluating projects or researching a business in the growth stage, the gross margin index and its changes are used to predict the payback period.

The main disadvantages of the RVP coefficient are closely related to its advantages. Undoubtedly, it should be used in analytics along with other characteristics of financial stability and profitability, since it cannot take into account the capital structure and all costs of the enterprise. Its focus only on marginal productivity factors deprives the coefficient of its ability to comprehensively and relevantly evaluate the company.

Since the gross profit margin rating is significantly inferior to net and operating profitability, its function is often erroneously overestimated by certain groups of users of financial statements. In addition, there is always the possibility of distortion of the RVP by the accounting policy used. Of course, reduced level profitability indices may also be inaccurate due to the nuances of maintaining accounting, however, much less than the profitability indicator of the VP.

It turns out that the optimal degree of this coefficient is not easy to estimate. Its use for comparison with the parameters of other industry organizations increases the vulnerability of the index due to the lack of detailed data on the circumstances of the dynamics of RRP among competitors. And explanatory reports and audit findings do not always contain complete information for such an assessment.

Due to the lack of uniform standards for assessing gross profit margin, when considering the indicator, you should first find its target level. Most best option– calculation of RVP based on reports from the industry leader in the company’s field of activity. When the use of benchmarking is impossible for some reason, it is necessary to perform an empirical assessment and monitor the dynamics of the coefficient for actual period prolonged activity. The main reasons for fluctuations in RVP are a number of factors:

• changing the selling price without taking into account the dynamics of calculating production costs;
• change in the purchase price of raw materials(materials) or other important expense items;
• change in sales scale(if the cost contains fixed or semi-fixed costs that are not directly related to the accounting method). For linear depreciation the reason is considered to be the consequences of accounting policies, and not the sales dynamics itself;
• fluctuations in the renewal rate of stocks of raw materials, materials and finished products. You need to understand the real reason for the increase in costs associated with rising prices for raw materials. Thus, if an enterprise accounts for inventories using the FIFO method, an increase in inventory turnover will cause a drop in the profitability of the VP due to a decrease in the part of more inexpensive resources (in terms of procurement time) in the cost price. With constant inventory renewal, price changes depend entirely on the revision of contracts with suppliers. It must be emphasized that despite the possible negative impact of an increase in this indicator on gross profit margin, for the business as a whole this increase is certainly a positive factor.

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The practitioner tells

How to Increase Your Gross Profit Margin

Buvin Nikolay,

Financial Director of Liteko LLC

The company's focus on increasing gross profitability is also related to positive trends in business, and with negative ones - say, a decrease in gross profit in some cases. I will list the main factors for the growth of gross profit margin:

Increasing the cost of sales by improving product quality (the marginal profitability of modernization should be greater than the current RVP indicator). Increasing the share of products sold with increased margins in gross revenue.

Reassessment of credit strategy regarding buyer discounts. At the same time, it is necessary to analyze the dynamics of the VP based on the results of changes in the CP.

Intensifying the activities of purchasers in searching for the most favorable prices and supply contracts based on conditionally variable and variable costs. Earned discounts for expanding the volume of purchases must be correlated with current financial market rates in order to avoid a negative net profit result for the sake of increasing the RVP due to the mobilization of additional current assets for financing.

Creation and implementation of direct cost management systems by creating a procedure for motivating staff for offering useful initiatives to increase savings on different phases production.

Factor analysis of the RVP index always attracts special attention from company owners, top management and the board of directors. For this reason, assessing the indicator may become more complicated, despite the elementary calculation formula, reliability and availability of data. The attitude of information users to the analytical theses provided to them should be taken into account. Let's say that experts can explain many of the reasons for the dynamics of RVP with the accounting policies of the enterprise (the impact of artificial adjustments). I advise you to avoid similar factors during the presentation in order to avoid misunderstanding by the audience and additional questions during the discussion that are difficult to explain without preparation.

As for forecasting gross profit margin, I would like to emphasize that this is often the main indicator of the profitability of a budget or business plan. This means that it must be calculated very carefully. In companies with a long history, the thoroughness of planning is supported by the actual results of past years. Newcomers can use the results of other industry leaders with similar SWOT analysis tools in their distribution.

The most important indicator in assessing the activities of an enterprise (especially production) is gross profit. When its core activity is unproductive, all other processes will also be unprofitable. Comparing the work of one company in different periods reporting, you need to take into account whether changes have been noted in its accounting area (methods of reflecting costs and revenue). The same algorithm applies when evaluating several companies. In addition to the absolute indicators of VP, it is rational to consider relative coefficients.