The concept of profit, income and revenue in an enterprise and the principle of calculating them according to the formula

Many people still do not have an accurate idea of ​​what constitutes the income of the enterprise and its profit. If you start a detailed study of this topic, then there is a large number of additional concepts that are clarifying. These include net profit, gross profit, EBITDA. In fact, when certain indicators are reflected by employees of statistical bodies, accountants and economists, then each specialist implies an exact meaning under any of these terms. These values ​​are specified in the legislative documents of the country, so it is necessary for every person working with reporting to understand them. But the area of ​​income and profit is also of interest to non-professionals, for whom knowledge of the essence of these terms will not be superfluous.

The easiest way to understand the concept of revenue. Revenue is those funds that were received by a company or person in the form of payment for services performed or goods provided. And it's easy to understand.
However, revenue has separate properties. In everyday life, revenue means the money that the seller receives in the form of payment. This refers to the cash method to take into account revenue. If the firm hands over the goods to the customer, allowing him to pay later (deferred payment), there is no revenue before the customer's money reaches the owner of the goods.
At large enterprises, another method is used to take into account revenue - to take into account according to accruals. With this method, even those funds that have not yet been received by the seller can be called revenue, if an act on the provision of services has been signed.
There is also net revenue and gross revenue. Gross revenue is the entire amount of money that was received for the provision of a service or the provision of a product. This type of revenue is almost of no interest. This is due to the existence of duties, excises and taxes that are included in the price. They will need to be returned to the state.
For this reason, the concept of net revenue was formed. This type of revenue is a direct characteristic of the work of the company, regardless of what payments to the state are contained in the prices of goods and services. It is the net proceeds that accountants always indicate when making a profit and loss statement for a company.

Revenue calculation formula: B \u003d R * C, where

B - revenue;
P is the number of products sold;
C - the selling price of each product.

What is income and how to calculate it using the formula?

Income is the amount that comes to the capital of the firm. How can he arrive? Firstly, by making contributions from the owners of the company, and secondly, thanks to the efficient operation of the enterprise. After all, any company is created in order to generate income.
It is very important to classify the costs and income received, so there are many documents regulating this activity. The most important of these documents are the Tax Code, as well as the Accounting Regulations, which provide explanations for any income and how it is generated in the company.
In short, the income from the main work is the net proceeds. The income of the company is sometimes equal to the revenue, however, in most cases, the company is engaged in a variety of activities, each of which produces its own type of income.
In addition to income from statutory types of work, the company may have other areas of income. These can be fines collected from partners in case of violations of contracts or interest on the deposit. Such incomes are among others, but they also help to form the profit of the company.

Gross income calculation formula: D = Z x Q, where:
D - gross income;
Z is the selling price;
Q - the number of units of goods.

Gross profit - what is it? Calculation formula.

The income of the enterprise should be summed up, the incurred costs should be deducted from them, and thus it will be possible to determine the gross profit. For example, income is generated by the sale of goods, and expenses are the costs of their creation, or their cost. Having found the difference between the first and second, it will be possible to find out what is the amount of gross profit from the type of activity of the company, which is the main one. Similarly, the amount of gross profit for other activities is clarified.
It is noteworthy that in the field of trade, gross profit is determined by finding the difference between the price and the cost of goods. In the field of industrial production, it is more difficult to calculate this indicator, since many costs are included in the cost.
The effectiveness of several enterprises is most often compared precisely in terms of their gross profit. It is also possible to keep track of which type of activity in one firm is the most effective, thanks to the gross profit indicators for each of the activities performed by the company. The creditworthiness of enterprises is also calculated by bank employees according to this criterion. But for the owners of the company, the net profit indicator is more important.

Gross profit calculation formula: VP \u003d BH - I (C + OZ), where:

VP - Gross Profit
NH - Net sales income
I − Costs
C + OZ - Cost + Operating costs

Net profit, concept and calculation formula.

All actions and operations of the company in a certain period of time are reflected in the net profit indicator. It is calculated by subtracting from the gross profit the costs that must be made by law. These costs include taxes, fines and other expenses.
Gross profit, after deducting the above costs, becomes the basis on which dividends are accrued to the owners of the company.
The value of net income demonstrates the results of the company's activities, which should be indicated in the balance sheet.

Net income calculation formula : PE \u003d FP + VP + OP - SN, where:

PE - net profit,

FP - financial profit,

VP - gross profit,

OP - operating profit,

CH - the amount of taxes.

Video on the topic: ebitda indicator

EBIT and EBITDA what is it?

Very important is the activity of the state to regulate the formation of net profit. It is at the state level that the costs of the enterprise are regulated. They can be different depending on the country in which the company is located, and even on the region.
Performing analytical work on the activities of the company, one cannot draw conclusions based on the value of net profit. Because of this, the comparison process takes into account the criteria of gross profit and net profit. There are two types of net income: EBIT(which exists before taxes and interest are paid) and EBITDA(which does not take into account taxes, interest and depreciation).

Ebitda calculation formula: EBITDA \u003d Income - (Expenses - Taxes - Interest on obligations - Depreciation charges), where
Income - revenue from core activities (TR - totalrevenue),
expenses - total cost (TC - total cost) excluding depreciation.

Ebit calculation formula: EBIT = Net income + Interest on loans and borrowings + Taxes payable

Actual ideas for making money