Analysis of the ratio of "sales - costs - profits" and applied...

Analysis of the ratio of "sales - costs - profits" and applied aspects of using its results

In the enterprise management system, the main attention is paid to the factors of profit formation. Analysis of the ratio of "sales - costs - profits" is one of the most common tools for information management and is built on the basis of the margin concept, the content of which is set out in Ch. 3. This type of analysis is one of the applied aspects of its use in the management of sales and profit. The tasks solved in the analysis of the ratio "sales - costs - profit" are as follows.

1. Determine the amount of revenue that provides coverage of all costs of the enterprise (critical volume), i.e. break-even operation of the enterprise; this task becomes especially urgent during periods of economic crises and market instability.

2. Calculate the amount of sales revenue that will save all existing personnel of the enterprise during periods of serious economic crisis, as well as its minimum number in conditions of a significant decrease in demand for products.

3. Rate profitability zone - the range of revenue in which the company generates profit from sales.

4. Determine the impact of changes in production and sales, provided in short-term periods on the profit from sales.

5. Evaluate the amount of sales revenue that will ensure sustainable development of the enterprise and return on invested capital is not lower than alternative investment opportunities.

The solution of problems is built on the analysis of the behavior of costs, depending on changes in the volume of production and sales. As is known from theory, costs are classified depending on changes in production and sales as variables (depending on the dynamics of production) and conditionally constant (independent of the dynamics of production in a certain interval of its change). In practice, this means that as the volume of production increases, so does the expenditure of a variable nature. In this case, the type of dependence in different industries can be linear and nonlinear (progressive or depressive).

In modern high-tech industries, only material (raw materials, materials, component parts, purchased semi-finished products, fuel and energy for technological needs, transportation costs) are referred to variable costs, since piece-rate forms of payment in similar industries are generally not used. At present, the piece-rate form of payment partly finds its application in the construction sector.

Conditional-constant costs include the costs of maintaining management personnel, most of the commercial costs, rental of premises, etc. Of course, the amounts of these expenditures do not remain constant from year to year, they grow or fall in absolute terms, but depending on the influence of very different factors. So, lease payments can grow not because of the increase in leased space, but depending on the growth of rental rates as a result of inflationary processes and in case of discrepancy between the areas leased and the demand for them. Expenditures for the maintenance of management personnel grow with the change in the organizational structure of enterprise management, increase in its number or as a result of higher wages.

At the same time, it should be borne in mind that if an enterprise plans to increase production by one and a half to two times as a result of the forecasted long-term sharp growth in demand and prices, then the buildup of production capacities will inevitably cause a spasmodic growth of conditionally-constant expenses in such a situation.

Graphical illustration of the behavior of revenue, costs and profits, depending on the dynamics of sales, gives a clear picture of the nature of the analyzed ratios (Figure 4.2).

A graphic illustration of the analysis of the

Fig. 4.2. Graphical illustration of the analysis of the ratio of "sales - costs - profits"

The two most important lines in the figure indicate the function of total revenue (revenue, B) and the function of total costs (Hs). The point of their intersection shows the volume of sales (or production) at which revenue is equal to costs and profit, hence, in that case it is zero (in the figure it is denoted as B0). This point is otherwise called the point of critical sales volume or break-even (Breake-e-mail-RT, BEP). Any volume of sales to the left of B0 does not ensure full coverage of the company's expenses and the difference between revenue and total costs will show the amount of losses.

The volume of sales is greater than that which ensures break-even operation allows you to generate profit. The sales volume, indicated in Fig. 4.2 as B , shows one of the options for the formation of the profit required by the enterprise.

If the area limited by the line of aggregate costs is divided into strata that characterize certain types of expenses, for example, payroll, payments on loans and borrowings, etc., it will be possible to determine the necessary sales revenue that allows to contain a certain amount number of employees, servicing of debt obligations, etc. Of course, in real practice, usually using graphic methods, rational management decisions are not used. For such purposes, there is a sufficient analytical-calculation toolkit.

The revenue necessary to ensure break-even work is calculated by the ratio of the amount of conditionally fixed expenses to the average relative margin income:

where В. ^ - the volume of proceeds, ensuring break-even operation, thousand rubles; Z.n - the amount of conditionally fixed costs, thousand rubles; Uzpe |) - the share of variable costs in revenue (the ratio of the sum of variable costs to revenue), coefficient; 1.0 - 1 ruble of revenue.

To calculate the amount of revenue sufficient to generate the required (planned) profit, the following formula is used:

where Вpr - the revenue necessary for the formation of the required amount of profit, thousand rubles; П || p - the sum of the required profit, thousand rubles.


The digital example illustrates the methodology for determining the amount of proceeds from the sale of products necessary to ensure break-even work and the formation of the required amount of profit to pay dividends to owners, staff bonuses and to finance the development of the enterprise. The initial data are given in Table. 4.5.

Table 4.5. Source data for the analysis of "sales - costs - profits"


Price of products, thousand rubles.

Specific variable costs, thousand rubles.


Costs of variables, thousand rubles.


Revenue, thousand rubles





345 000

264 000



2: 120


556 800





157 5000

980 000


2 700 000

1 800 800

Note. The amount of conditionally fixed expenses is 383,780 thousand rubles. and the required mass of profit 495 000 thousand rubles.

The sales revenue that covers all costs is

which is 40% of the planned revenue and, therefore, the "profitability zone" - 60%. The amount of marginal income is equal to 959 200 thousand rubles. The likelihood that sales will fall by more than 60% is small. Consequently, the risk of an enterprise transitioning to a loss-making zone is very low.

The amount of revenue required to generate profits sufficient to meet the financial interests of the main stakeholders is calculated as follows:

As the estimated profit from the projected sales volume by 16.2% (575 420: 495 000 -100 - 100) is more than the result we obtained, it should be concluded that the financial interests of the main stakeholders will be realized with sufficient confidence.

To confirm this confidence, an additional analysis of the sensitivity of the enterprise's profit to changes in market conditions is necessary: ​​the prices for the sale of products, the volume of demand, the prices of the material components used, the fixed costs. The purpose of such an analysis is to determine the threshold values ​​of the named parameters, at achievement of which the enterprise receives losses instead of profit, i.е. how many percent should the analyzed parameters deteriorate, so that the enterprise falls into a unprofitable zone, and what is the probability of such a development of events.

No less important task of analyzing the ratio of "sales - costs - profits" is an estimate of the impact of changes in sales on profit from sales. This is determined by the strength of the operating leverage (the effect of the operating leverage), which shows how much the company's profit can be increased by 1% if sales volume (revenue) grows by 1% (at constant sales prices and constant costs level).

The strength of the operating lever (COP) is calculated by the formula:

COP = Marginal revenue/Profit from sales. Example

With an annual sales volume of 100 million rubles, the amount of variable expenses is 70 million rubles. and the amount of conditional-permanent expenses is 20 million rubles. The profit of the enterprise from sales is 10 million rubles, and the margin income is 30 million rubles. (100 to 70). Under such conditions, the strength of the operating lever is three (30/10). This means that with an increase in annual sales, for example, by 10%, the company's profit will increase three times as much, i.е. by 30% (10 • 3) and will amount to 13 million rubles.

It is easy to see that the more the share of conditionally constant expenses in the cost of production, the stronger the operating lever acts. With a decrease in sales volumes, the strength of the operating leverage determines the acceleration of the fall in profits. Therefore, the notion of operating leverage is closely related to the concept of operational risk, which is associated with the possibility of obtaining losses from current activities as a result of a decrease in sales due to the need for technical re-equipment of production, a fall in demand for products or a reduction in sales prices. With a limited profitability zone and a high value of the operating leverage force, as a result of the high proportion of conditionally constant costs, the risk increases, and vice versa, with a low specific weight of fixed costs in the cost structure, the risk decreases. The effect of the operating leverage determines the higher degree of dependence of high-tech industries on the fluctuations in demand for their products, the proportion of fixed costs in the cost of which is usually very significant.


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