3.1. The basic directions of increase of profitability of manufacture of the
enterprise of LLC "Delux Fabric"
Based on the analysis of the profitability of the enterprise and its dynamics, the
following conclusions can be drawn:
1. Analysis of calculated data for the analyzed period shows that, on the whole,
there is a positive dynamics of development. In most cases, profitability indicators
have increased. There is a decrease in profitability of sales, a decrease in the return on
equity. This is due to the fact that in 2016 there was an increase in equity nearly 2
times (due to the growth of reserve capital and retained earnings). As the analysis
showed, this capital was used ineffectively. In addition, the cost of production sharply
increased, which affected the growth of the price of the goods, and in consequence-
and the decrease in sales volumes.
2. An important indicator is cost efficiency. It allows you to determine what
proportion of the profit is accounted for 1 sum of costs. This indicator relative to
2014 fell by 16.9 points, compared to 2015 / by 3.7 points. This is primarily due to
the fact that as a result of the increase in cost, the gross profit from sales is reduced
and the costs for production and sales are increased.
3. With respect to profitability, the enterprise has a positive trend. Despite the
increase in operating and administrative expenses, revenues from financial activities
also increased, which had a positive effect on net profit. Compared to 2015, the
increase in net profit was 23.27%. Among other things, the company is absolutely
liquid, that is, its liquidity is 26%.
The analysis made it possible to identify the main problems of the enterprise:
increase in production costs, decrease in sales and labor productivity.
Based on the definition of the level of profitability of production, we can
conclude that there are two principal directions for improving profitability:
- due to the growth of prices at constant cost price - while the profit grows, and
hence, profitability;
- due to lower costs, higher profits and a corresponding increase in profitability.
The second way - cost reduction - is more justified economically. It leads to a
constant, albeit not so significant, improvement in production indicators, its quality
growth, lower costs and higher profitability. However, this path is associated with the
need for constant, painstaking, planned work to improve the various aspects of
production, improve the quality of products, labor, the introduction of various
innovations, etc.
One of the ways to increase profit is also the saving of electricity during the
operation of energy-intensive industries, as well as a more carefully developed
technology that allows to significantly reduce the production waste
According to one of the many approaches, the growth of the profitability of an
enterprise is facilitated by the manipulation of three factors characterizing its
profitability:
1) acceleration of business activity;
2) a reduction in the mass of costs;
3) an increase in the rate of profitability by increasing the cost.
The main purpose of analyzing the level of profitability of the enterprise is to
identify reserves and ways to increase it. An important factor in increasing
profitability in modern conditions is the work on resource saving. It leads to a
reduction in costs and cost, and so to an increase in profits.
Reducing the cost of production can be achieved by:
-reduction of material consumption of products by introducing new,
- economical types of structures;
-application of resource-saving equipment and technology,
-low-waste technologies,
-modern forms of automation and information technologies;
-use of progressive types of materials,
-elimination of costs during processing, storage, transportation of materials,
-strengthening control over the storage of materials,
-elimination of shortage and loss of materials; Reuse of material resources;
-increase in productivity of work,
-maintenance of a favorable social microclimate in the work collective;
More efficient use of production equipment.
To improve profitability, you also need:
Expand the scope of activities, possibly by attracting new borrowed funds,
reduce the material consumption of products, apply new advanced technology and
technology, increase the productivity and skills of employees, the efficiency of the
use of equipment;
Thus, the ways of increasing the profitability of the enterprise are the reduction
of the cost of services, the increase in sales volumes, the corresponding growth in
profits, as well as increased efficiency and more rational use of current and fixed
assets, own and borrowed capital.
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