Problem No. 73. Calculation of accounting and economic profit

Meaning

The indicator under consideration, among other things, characterizes the rational use of material and labor resources. In general, accounting profit is the difference between the income and expenses of an enterprise.

Based on the value of the PWB, calculations are made to assess the effectiveness of the activity. For example, analysis is carried out in relation to material resources using various indicators. But the general one for them is profit per 1 ruble. material costs . The resulting coefficient is equal to the quotient of the extracted profit from the main activity (P) to the amount of material costs (MZ):

The growth of this value positively characterizes the activity of the enterprise. In practice, specialists conduct such analysis in more depth, using various factor models and establishing the reasons for changes.

Let's start with concepts and meanings

Accounting profit (BP) is a key economic indicator. It characterizes production efficiency, rational use of resources and the overall productivity of the company’s financial and economic activities. The calculated value of accounting profit is determined through income and expenses - their difference shows the real economic situation of the enterprise.

The result obtained is always either positive or zero. If the difference between income and expenses is negative, the economic situation of the organization is unsatisfactory, and we are talking about accounting losses. Consequently, the company will receive a positive accounting profit if the total revenues from all types of activities exceed the total costs for the same period of time.

After the calculation, analyze the main indicators of financial and economic activity. For each index, profitability per ruble of added material costs is calculated. Here's how to find accounting profit and check your investment's performance:

Step 1. Determine income and expenses.

Step 2. Calculate accounting profit: find the difference between profitability and costs.

Step 3. Select the financial indicator of interest and calculate the coefficient using the formula:

K = P / MZ,

Where:

• P - profit received from core activities;
• MZ is the amount of material costs.

If the index is positive and continues to grow over a given time period, the company's core business is productive. A negative value characterizes the ineffectiveness of investments and an unfavorable economic situation for the enterprise.

Approach: How to Calculate Accounting Profit

According to the Regulations on accounting and reporting in the Russian Federation (Order of the Ministry of Finance No. 34-n, clause 79), the indicator under consideration is the final financial result for the reporting period. It is determined based on:

1. accounting documents for all business transactions;
2. balance sheet items.

Thus, all sources of income are summed up. And the formula for accounting profit looks like this:
PRb = D – Zav
Where: D – the company’s income for the period under review; Claims are obvious costs, which include labor costs, equipment purchases, utility bills, etc.

EXAMPLE 1

Based on accounting documents and the balance sheet, she received income in the amount of 10 million rubles in 2021. The table shows the costs associated with financial and economic activities. What will be the accounting profit ?

Solution: 10,000,000 – 8,900,000 = 1,100,000 rubles.

EXAMPLE 2

Income for the past year amounted to 6.5 million rubles, and expenses were approximately the same 6.5 million rubles. What will be the accounting profit?

Solution: Since both indicators are equal, the activity brought neither profit nor loss to the organization.

Accounting profit - formula

If we consider the data from the point of view of drawing up a balance sheet (Form-1), then the formula for determining profit has the following form:

Profit according to accounting = Revenue (line 2110) – Cost (line 2120) – Commercial expenses (line 2210) – Management expenses (line 2220) + Income received from participation in enterprises (line 2310) + Amount % to receipt (line 2320) – Amount % payable (line 2330) + Other income (line 2340) – Other expenses (line 2350)

Important! When results are received, negative values ​​in reporting are reflected not with a minus sign, but in parentheses.

Types of accounting profit

It is customary to divide it depending on what revenues and/or costs are involved in the formation of the accounting profit .

Let's give an example

Financial results of 2021 for the organization: income - 15,000,000.00 rubles, expenses - 10,000,000.00 rubles. According to the rules, only explicit costs are taken into account when calculating accounting profit. The items of such costs are presented in the table:

Let's calculate profitability for 2021. BP = 15,000,000.00 - 10,000,000.00 rubles = 5,000,000.00 rubles. This is a positive value, which means production efficiency and productivity of financial and economic activities.

Reflection of the organization's profit in accounting

To determine this indicator, you need to be guided by information from synthetic accounting accounts.

Complete information on profit or loss for the reporting annual period is contained in account 99 “Profits and losses”. It is formed due to:

• receipt of revenue from sales (account 90);
• other income and expenses (account 91).

Such recommendations are contained in Order No. 94-n of the Ministry of Finance of 2000.

The “Profit and Loss” account also reflects various transactions every month throughout the year:

• financial receipts from sales or ordinary activities (Dt 90.9 – Kt 99);
• losses from sales or ordinary activities (Dt 99 – Kt 90.9), etc.

Also on account 99 are the amounts of accrued expenses (income) related to taxation, fulfillment of permanent obligations or tax sanctions. The correspondence goes to account 68 “Calculations for taxes and fees”.

At the end of the year, the received funds are transferred to account 84 “Retained earnings”. This is a kind of closing of accounts for the past period. The formula for accounting profit at the reporting date will look like this:
PRb = Balance 99 + Balance 84
Also see “How to keep accounting records in an LLC.”

Correspondence of profit indicators in the balance sheet and the financial results report

Where can you find the profit margin on the balance sheet ? It indicates its value after taxation, formed on the account. 99.

If the balance sheet is drawn up for some intermediate period (for example, at the request of the company’s investors), then the financial result generated on an accrual basis during the year, together with the available account balance. 84 is indicated on page 1370. After the balance sheet reformation, the indicated line shows the account balance. 84, since count. 99 is closing.

The value of net profit, which is calculated in form No. 2, must coincide with the balance obtained on the account. 99 and written off with the final turnover of December to the account. 84.

To calculate net profit in the second form, you need to fill out the following lines:

• The amount of accrued income tax for the period is entered on line 2410.
• Lines 2421, 2430 and 2450 reflect the amounts of deviations in accounting from tax accounting based on PBU 18/02:
• Page 2421 - the difference between the debit and credit turnover of the account. 99 “PNO (PNA)” in correspondence with the account. 68 (hereinafter we are talking about the subaccount corresponding to income tax calculations).
• Page 2430 - the difference between the credit and debit turnover of the account. 77 in correspondence with account. 68.
• Page 2450 - the difference between the debit and credit turnover of the account. 09 in correspondence with account. 68.
• Other amounts according to account. 99 should fall into the 2460 field.

To obtain net profit, you need to subtract the amount of tax from accounting profit. After this, depending on the revolutions on the count. 09 and 77:

• according to account 09: if the debit turnover is higher than the credit turnover, then the difference is added to the profit (loss) before tax. If it’s the other way around, it’s deducted.
• according to account 77: if credit turnover exceeds debit turnover, then the difference is deducted from profit (loss) before tax. Otherwise, the difference is added to this indicator.

If a negative financial result is obtained, income tax is added to it with a minus sign.

Through the income tax calculated from accounting profits (conditional expense), you can check whether the amount of current tax was calculated correctly, which is equal to the conditional expense plus PNA and ONA and minus PNA and ONO.

Actions with ONO and ONA in the calculation will depend on the prevailing turnover in their accounts. If at the end of the period there is a loss, then the signs of the values ​​composing the calculation change to the opposite.

***

The amount of profit calculated according to accounting data is reflected in Form No. 2 of the accounting reports. Account data is used to fill out the lines of this form. 90, 91, 99, in addition, it is important to take into account deviations that arise in accounting in accordance with PBU 18/02. In general, the calculation methods, both in the standard and in the abbreviated version of Form No. 2, are similar.

The balance sheet reflects the amount of profit after all income tax payments have been made, and does not contain any other intermediate data.

Similar articles

• Formulas for calculating net profit and details of their application
• What is book profit?
• Rules for filling out form No. 2 for the balance sheet
• Profit before tax
• Statement of financial results of the simplified tax system - example of filling

Accounting and economic profit: what is the difference?

When analyzing business activities, experts often identify so-called lost profits and implicit costs. These include funds that could be obtained, for example, by using a different strategy or making a different management decision.

It is important to understand that accounting profit is a measure that excludes implicit costs.
Another value takes them into account - economic profit. It helps compare the desired profitability with the minimum required to meet all expectations and represents the difference between total income and all types of costs. Mathematically, the equation looks like this: Accounting profit = economic profit - implicit costs
When assessing efficiency, economic profit gives a complete picture of the use of enterprise assets, since it compares the actual result with rejected opportunities. A positive result indicates the rational use of resources. A negative or zero value may indicate a loss of funds from capital.

Also see “Retained earnings on the balance sheet, what is it?”

Read also

23.11.2018

The role of other income and expenses in the formation of net profit

Income is your revenue from your main activity (sales, provision of services or performance of work) and from additional sources (bank interest, rental of property). When calculating income tax, income is taken into account without VAT and excise taxes and is confirmed by: invoices, payment orders, entries in the book of income and expenses, and accounting registers.

Expenses are confirmed and justified expenses of the company. They are associated with production activities:

• employee salaries;
• cost of raw materials and equipment;
• depreciation;
• etc.

But there are also those not related to production:

• legal costs;
• difference in exchange rates;
• interest on loans;
• etc.

Accountants pay close attention to documents that confirm income tax expenses, since income can be reduced by expenses only if the following conditions are met:

• expenses must be justified - prove economic feasibility;
• Primary documents (book of income and expenses, tax registers) must be completed correctly.

At the same time, there is a list of costs that cannot be taken into account when reducing the base.

Subtracted from income:

• commercial, transport, production costs (raw materials; wages; depreciation; rent; services of third-party lawyers; representation expenses);
• interest on debts;
• expenses on advertising (with a limitation - only 1% of sales revenue is written off);
• insurance costs;
• spending on research (to improve products);
• expenses for education and training of personnel;
• expenses for the purchase of databases and computer programs.

The list of costs that do not reduce income is given in Article 270 of the Tax Code of the Russian Federation. This:

• remuneration for members of the board of directors;
• contributions to the authorized capital;
• contributions to the securities reserve;
• payments for exceeding the level of emissions into the environment;
• losses associated with economic activities in the communal, housing and socio-cultural spheres;
• penalties and fines;
• money and property transferred to pay for loans and borrowings;
• fees for notary services above the tariff;
• prepayment for a product or service;
• repayment of loans for employee housing;
• voluntary membership contributions to public funds;
• the amount of revaluation of the Central Bank with a negative difference;
• the cost of property that was given free of charge, transfer costs;
• payment for employee travel to work and home, if it is not provided for by production features and contract;
• pension benefits;
• vouchers for treatment and rest of employees;
• payment for vacations that are not provided for by law, but are specified in the contract with the employee;
• payment for sports and cultural events;
• payments for personal consumption goods purchased for employees;
• the cost of subscriptions to newspapers, magazines and other literature not related to production;
• payment for food for employees, unless this is provided for by law or collective agreement.

We invite you to familiarize yourself with Valuation of an apartment for a mortgage, how the value of an apartment is assessed for a mortgage on a mortgage

The moment of recognition is the period of time in which income or expenses are reflected in income tax accounting. There are two such moments. They depend on the method of recognizing income and expenses:

• cash method;
• accrual method.

The company chooses one of the methods, and before December 31 (without waiting for the start of the next tax period) informs the territorial body of the Federal Tax Service of Russia about its choice.

When applying methods, firms take into account amounts at different points in time. Let's look into the nuances.

The cash method assumes that:

• income is taken into account at the time of receipt at the cash desk or in the company's current account, not earlier;
• expenses are taken into account at the time of debiting from the account or paying from the cash register, not earlier;
• When paying tax, amounts are taken into account according to the dates of receipt or write-off.

Accrual method:

• income is taken into account at the time of occurrence (under contracts or payment orders), and not upon direct payment;
• expenses are taken into account at the time of occurrence, and not when funds are written off from accounts;
• When paying tax, amounts are taken into account based on documented dates, even if payment actually occurred later.

All enterprises can use the accrual method. But the use of the cash method is limited:

• Banks are prohibited from using it;
• Firms recognize income and expenses in fact only if revenue does not exceed 1 million rubles. for each of the last four quarters;
• If, when applying the method, the limit is exceeded, then the company is obliged to switch to the accrual method from the beginning of the current year.

What is the tax base if the company suffers a loss?

According to tax accounting rules, the profit of an organization cannot be negative. Even if there is a loss at the end of the year, the tax base is recognized as zero. The tax in this case is also zero. Tax accounting registers must confirm the correctness of the tax base calculation. It is mandatory to submit a declaration, even if the amount is zero.

Often, the company's core activities do not bring it the desired net profit. This happens especially often at the initial stage of a company’s formation. In this case, the additional income received by the company can be of great help.

For example, you can make a profit from participating in other companies or successfully invest free funds in securities. The income received will help increase net profit. Even a regular agreement with a bank on using the balance of money in the company’s current accounts for a certain percentage will allow the company to receive additional income, which will certainly affect its net profit.

But if a company uses borrowed funds in its work, the interest accrued for using the loan can significantly reduce the net profit - one should not forget about the impact of the fact of borrowing on net profit. The amount of interest on borrowed obligations (even calculated at the market rate) can seriously reduce net income, and in certain cases lead to losses and bankruptcy.

Whether the company's debts can be collected from the chief accountant in the event of bankruptcy, find out by following the link.

A variety of income and expenses not related to the company's core activities have a significant impact on net profit. For example, renting out unused space or equipment can bring good additional income and have a positive impact on your net profit. Net profit will increase if the company's assets that are not used in its activities are sold.

At the same time, we should not forget about the need for constant monitoring of the composition and amount of other expenses - as they increase, net profit decreases. For example, net income may decrease as a result of excessive spending on charity and other similar situations.

We will tell you in this material how to reflect charity expenses in accounting.

How to calculate net profit on a balance sheet

All types of profit are calculated on the basis of revenue, which is equal to the product of sales volume and unit price. Certain cost items are subtracted from primary income and thus each type of profit is found.

Revenue is found using the following formula: TR = P * Q, where

P (price) – price, rub.;

Q (quantity) – quantity of products, rub.

Marginal profit is equal to: MP = TR – VC, where

MP (marginal profit) – marginal profit, rub.;

VC – variable costs for production volume, rub.

Gross profit can be found using this formula: GP = TR – TCtechn, where

GP (gross profit) – gross profit, rub.;

TCtechn (total cost) – technological cost, rub.

Profit from sales is found as follows: RP = TR – TC, where

RP (realization profit) – profit from sales, rub.;

TC (totalcost) – total cost, rub.

Balance sheet profit is equal to: BP = RP – OE OR, where

BP (balanced profit) – balance sheet profit, rub.;

RP (realization profit) – profit from sales, rub.;

OE (other expenses) – other expenses, rub.

Operating profit is calculated using this formula: OP = BP PC, where

PC (percent) – interest payable, rub.

Net profit is found as follows: NP = BP – T, where

The calculation data is provided in the financial results statement. Available information from the financial statements allows you to calculate the two types of profit below using one formula.

Marginal and gross profit can be found using this formula: line 2100 = line 2110 – line 2120, where

line 2100 – gross profit, rub.;

line 2120 – technological cost, rub.

Profit from sales is found as follows: line 2200 = line 2110 – (line 2120 line 2210 line 2220), where

line 2200 – profit from sales, rub.;

(p. 2120 p. 2210 p. 2220) – total cost, rub.

Balance sheet profit is equal to: line 2300 = line 2200 – line 2350 line 2340, where

line 2200 – profit from sales, rub.;

line 2350 – other expenses, rub.

Net profit is found as follows: line 2400 = line 2300 – line 2410, where

line 2410 – amount of tax burden, rub.

Examples of calculations

Marginal profit: MP = TR – VC = 70,000 – 25,000 = 45,000 rubles

Gross profit: GP = TR – TCtechn = 70,000 – 25,000 = 45,000 rubles

Profit from sales: RP = TR – TC = 70,000 – (25,000 4,000 13,000) = 28,000 rubles

Balance sheet profit: BP = RP – OE OR = 28,000 – 3,000,800 = 25,800 rubles

Operating profit: OP = BP PC = 25,800 4,000 = 29,800 rubles

Net profit: NP = BP – T = 29,800 – 29,800 * 0.2 = 23,840 rubles

Marginal profit: MP = TR – VC = 130,000 – 45,000 = 85,000 rubles

Gross profit: GP = TR – TCtechn = 130,000 – 45,000 = 85,000 rubles

Profit from sales: RP = TR – TC = 130,000 – (45,000 6,000 18,000) = 61,000 rubles

Balance sheet profit: BP = RP – OE OR = 61,000 – 2,000 1,000 = 60,000 rubles

Operating profit: OP = BP PC = 60,000 6,000 = 66,000 rubles

Net profit: NP = BP – T = 60,000 60,00 * 0.2 = 48,000 rubles

In the liability side of the balance sheet there is line 1370 “Retained earnings (“Uncovered loss”). Net profit in the balance sheet accumulates precisely on this line. In order to determine the final financial result, you need to know its value at the beginning and end of the analyzed period. Net profit on the balance sheet formula in this case is as follows

PP = NPkts – NPnch, where

NPnch and NPkts – indicators of line 1370 for the first and last date of the period

However, this formula will allow you to correctly determine the value of net profit only if certain conditions are met. Namely, only in the case when the owners of the company decided not to distribute the profit received during the period. In this case, the change in the value of line 1370 of the balance sheet for the period is equal to the value of line 2400 of the income statement.

PP = NPkts – NPnch D PR,

Where D – dividends paid

PR – other areas for using profits (for example, replenishing the reserve fund)

Those. in this case, it is no longer possible to determine net profit based only on balance sheet data, because This reporting form does not contain information about the use of profits.

As a result of the calculations, it may turn out that the final result turns out to be negative, which indicates that a loss was incurred during the analyzed period.

Despite the fact that the balance sheet, unlike Form 2, is not directly intended to calculate net profit, many of its indicators directly or indirectly affect its value.

Most non-current assets are depreciable assets. The change in their value over the period (if we do not take into account the receipt of new objects and disposal) is depreciation, i.e. company expenses.

A decrease in balances under the item “material inventories” may also indirectly indicate an increase in costs. This indicates that more materials and goods were written off during the period than were purchased.

As for liabilities, only the item “Borrowed funds” directly affects costs. The larger the amount of loans and borrowings, the correspondingly more interest is accrued.

In addition to costs, the profit margin directly depends on revenue. It is almost impossible to determine this indicator from balance sheet data. Indirectly, revenue growth can be evidenced by an increase in accounts receivable and a decrease in accounts payable. But the reasons for such a change in indicators may be other, for example, repayment of previously incurred debt or payment of advances to suppliers of goods and materials.

Calculate the volume of net profit in stages:

1. First, you should collect all the costs incurred in the production process - the cost of materials and raw materials, wages and contributions to funds, depreciation of production equipment and intangible assets, energy costs, utility bills, rent, commercial and administrative costs. This is how the cost of production is formed;
2. Calculate revenue. She does:
   from the sale of products;
3. from investments;
4. from the company's financial transactions.
5. Using the profit calculation formula “Profit = Revenue – Costs”, the company’s gross income is calculated;
6. The intermediate link between gross and net profit is the indicator of profit from sales, which is found by reducing the amount of gross profit by the amount of commercial and administrative costs;
7. The value of the profit before tax indicator forms profit from sales, increased by profit from other activities;
8. Net profit is calculated by reducing the amount of gross income by the amount of tax and other necessary payments. Only extraordinary expenses incurred are deducted from the net profit figure.

Let us recall that the financial flows of companies are formed not only from trading revenue, i.e., operating activities. Many firms generate income from financing activities and investing. These items must be included in the net profit remaining in the company. The process of generating a company's profit is clearly demonstrated in the Financial Results Report. Based on the principle of its compilation, all companies, regardless of their form of ownership and industry affiliation, calculate profits.

The calculation formula “Profit = Revenue – Costs” is simple and unchanged for any type of profit, but the changing value of costs makes it possible to analyze this indicator from different angles.

The amount of profit is an indicator of how efficiently the organization operates. The amount is subject to the established tax, and the profit and loss statement is part of the mandatory financial reporting documents.

In this regard, it is extremely important to have the skills to calculate the profit of an enterprise.

The organization sells goods, services or works. At the same time, the established selling price is higher than the actual one, as a result of which the company receives a positive difference between prices - income.

During the implementation process, the following scenarios may develop:

• the amount of revenue is higher than the actual cost - a profit is formed;
• the amount of revenue is equal to the cost - no profit is generated, but no loss either: the revenue is enough to cover expenses;
• the amount of costs for the sale and production of goods exceeds the amount of revenue - a loss is formed.

The goal of each enterprise should be, if not to obtain maximum profit, then at least to strive to generate the net income necessary for a competitive position.

Profit is the main goal of entrepreneurship. On the one hand, it has a stimulating nature - both the management of the enterprise and the employees are interested in receiving it. After all, the higher the amount of profit, the higher wages employees can receive.

On the other hand, this expression is not always true. Increasingly, there are cases where profits are exploitative in nature: an enterprise increases profits by reducing wages.

This method may bring some benefit, but the effect will be short-lived.

Profit becomes the only correct method of financing an enterprise: the authorized capital cannot last long without receiving funds. Borrowed money is also not the best option for permanently securing a company.

Having understood that profit is the difference between the total income and expenses of an enterprise in monetary terms, let us consider the structure of profit from the point of view of economics. Main types of profit:

• from implementation;
• gross;
• clean;
• balance sheet;
• marginal.

Results

Net profit is a complex indicator that includes all types of income received by the company, taking into account expenses incurred. If the company's costs exceed the total of sales revenue and additional other income, then we can talk about the absence of net profit and the company's activities are unprofitable.

Net profit allows merchants to expand their business, master new technologies and markets, which, in turn, has a positive effect on the increase in net profit.

Formula for calculating net profit

PP = B – SS PD – PR – N -NR, where

B – revenue from core activities;

CC – full cost, which includes the entire amount of costs for the main activity, i.e. direct, selling and administrative expenses;

PD and PR - other income and expenses not related to the main activity (in particular, interest received and paid);

N – income tax;

NR - tax differences arising due to deviations between accounting and tax accounting. They can affect profits either positively or negatively, depending on the accounting features.

Profit before taxes is often called book profit. Thus, balance sheet and net profit differ by the amount of income tax and tax differences (if any).

The final net profit calculated using this principle is contained in line 2400 of the income statement.

Net profit is not explicitly shown in the balance sheet, but under certain conditions it is possible to calculate net profit on the balance sheet. We'll look at how to do this in the next section.

This indicator can be calculated using several formulas. The meaning of all methods is the same, and the final amount will not differ, so you can use any of them.

PP = FP VP OP - N, where

• PE - net profit;
• FP - financial profit. It is calculated by subtracting similar expenses from income from financial activities;
• VP - gross profit. Calculated as sales revenue minus production costs;
• OP - operating profit. Expenses are deducted from income from other activities;
• N is the amount of taxes.

Calculation example. For example, LLC Firma in 2015 sold products worth 600 thousand rubles, the cost of which was 400 thousand rubles. One of the premises was also rented out, the proceeds amounted to 100 thousand rubles. Income from financial investments in other enterprises - 70 thousand rubles. Other costs - 100 thousand rubles.

• Let's calculate the gross profit: 600 - 400 = 200.
• Financial profit: 70 thousand rubles.
• Operating profit: 100 - 100 = 0 rub.
• Tax: (200 70)*20% = 54 thousand rubles.
• Net profit will be: 70,200 - 54 = 216 thousand rubles.

Simplified formula

CP = V PD - SP - UR - PR - N, where

• B - revenue;
• PD - other income;
• SP - cost of production;
• UR - administrative expenses, advertising costs;
• PR - expenses for other activities;
• N is the amount of taxes paid.

Data for calculation using this method can be taken from the company’s financial performance report for the required period.

• Net profit will be: 150 2 - 60 - 15 - 20 - 1.5 - 11.1 = 44.4 thousand rubles.

PP = P - N, where

• P - profit;
• N is the amount of taxes.

In this calculation option, profit is understood as the difference between the organization’s total income and costs for the reporting period.

Calculation example. Let the income of LLC “Organization” in the reporting year amount to 500 thousand rubles. Cost - 300 thousand rubles. The machine was sold for 20 thousand rubles. Other costs - 100 thousand rubles.

• First you need to calculate all income: 500 20 = 520 thousand rubles.
• Next, we determine the costs: 300 100 = 400 thousand rubles.
• We determine the final profit: 520 - 400 = 120 thousand rubles.
• We charge income tax: 120*20% = 24 thousand rubles. to the budget.
• Amount of net profit: PE = P - N = 120 - 24 = 96 thousand rubles.

Page 2400 = page 2300 - page 2410, where

• line 2400 - net profit;
• line 2300 - profit before tax;
• line 2410 - amount of income tax.

The data for this calculation method must be taken from the income statement.

Net profit will be:

• (150 - (60 15 20) 2 - 1.5) - 11.1 = 44.4 thousand rubles.
• 55.5 - 11.1 = 44.4 thousand rubles.

The indicator is equal to the difference between all income and all costs, including the tax burden.

To calculate, it is necessary to take revenue and costs for the same period for the entire volume of produced and sold products.

NP = TR – TC OR – OE – T, where

NP (net profit) – net profit, rub.;

TR (total revenue) – revenue, rub.;

TC(total cost) – total cost, rub.;

OR (other revenue) – other income, rub.;

OE (other expenses) – other expenses, rub.;

T (taxes) – tax burden, rub.

The total cost consists of the total costs associated with the production and sale of products. Other income and expenses will include exchange rate differences, purchase/sale of securities, rental of non-production premises, etc.

The tax burden for a commercial enterprise consists of several taxes. The main one is income tax with a standard rate of 20% of book profit (may vary due to the specifics of the activity and region). It is worth noting that insurance premiums are not included in the total amount of taxes, but in the cost price as part of wages.

NP = BP – T, where

NP (netprofit) – net profit, rub.;

BP (balanceprofit) – balance sheet profit, rub.;

Page 2400 = page 2110 – (page 2120 page 2210 page 2220) page 2340 – page 2350 – page 2410, where

line 2400 – net profit, rub.;

line 2110 – revenue, rub.;

(p. 2120 p. 2210 p. 2220) – total cost, rub.

line 2340 – other income, rub.;

line 2350 – other expenses, rub.;

line 2410 – income tax, rub.

Page 2400 = page 2300 – page 2410, where

line 2300 – balance sheet profit, rub.;

line 2410 – income tax, rub.

Calculation example

NP2013 = TR – TC OR – OE – T = 110,000 – (35,000 8,000 17,000) 2,000 – 3,000 – 49,000*0.2 = 39,200 rubles

NP2014 = TR – TC OR – OE – T = 170,000 – (55,000 10,000 27,000) 1,500 – 3,000 76,500*0.2 = 45,200 rubles

NP2013 = BP – T = 49000 – 49000*0.2 = 39,200 rubles

NP2014 = BP – T = 76500 – 76500*0.2 = 61,200 rubles

Net profit is considered to be the money remaining with the company after all taxes, contributions and other obligatory payments have been paid from the balance sheet. Net profit remains in the company and is a financial source used for various needs of the company, development of the production base, formation of reserve and incentive funds, increase in working capital, payment of dividends.

The formation of net profit is influenced by:

• Income from the sale of goods or provision of services;
• Cost of manufactured products;
• Amounts of mandatory payments, incl. tax.

Net profit is an important indicator that proves the success and respectability of a company; profit affects the future of the company, its development and competitiveness; the net profit formula reflects solvency and financial reliability, which is primarily assessed by investors.

Net profit is understood as that part of the income received by the company that remains after deducting all costs (for purchases, salaries, rent, taxes, credit deductions and others necessary for the sale of goods).

This accounting indicator is very important for all companies, regardless of what type of activity they are engaged in.

Net profit allows you to calculate how much it is possible to increase trade turnover, to what extent the increase in production is realistic and to calculate the amount of investment of working capital in production or to analyze the effectiveness of trading activities based on net revenue.

In essence, the accounting formula used to calculate the net profit from production of a product or to determine the net profit from sales made has the same economic meaning, but is often reflected using different initial data. Therefore, it is possible to calculate the net profit (NP) indicator in several ways:

1. PE = revenue – taxes – expenses (administrative, commercial and others) – production cost.
2. PE = profit before tax - tax deductions.
3. PE = total profit (financial, gross, operating) – tax deductions.
4. You can find the net profit from completed sales using the formula: PE from sales = level of gross profit – commercial expenses – administrative costs of sales.

To calculate the net profit from completed sales or production profit using any of the formula options, you will need an indicator such as revenue.

It represents the total amount of money received by the company from the sale of goods over a certain period of time.

For calculations, total (or gross) revenue is used, which includes three areas. These include:

• revenue from sales (product, goods, services);
• from investments (for example, from the sale of securities);
• from the financial activities of the company.

The next indicator that appears in the formula and plays an important role in obtaining net profit either from sales or from production is taxes, i.e. funds that a profit-making enterprise must transfer to the state fund.