Profit is the most desirable thing for anyenterprise. But for prosperity, it should not only be received, but also reasonably spent. Therefore, the profit of the enterprise, the distribution and use of profit, we will consider in the framework of this article.
general information
What is the main property thatreceives within the company the profit of the enterprise? The distribution and use of profits should ensure the financial resources of reproduction needs by setting the optimal balance between funds, that accumulation and consumption are directed. In this case, special attention is paid to the state of the competitive environment. It must always be considered. After all, the state of the competitive environment can have a significant impact in terms of production capacity, its expansion and renewal. Based on a number of factors, a decision is made about how the formation, distribution and use of profits will occur. Whether funds will go to finance capital investments, increase working capital, provide research and development, introduce new technologies, or something else - is decided during this process.
What is profit itself?
The so-called monetary expression of savings is calledare created by enterprises regardless of their form of ownership. Due to profits, the financial result of the company's activity is characterized. It is an indicator by means of which the efficiency of production, the quality and volume of the products created, the level of prime cost and labor efficiency are reflected most fully. Thanks to all this, profit is one of the main economic and financial indicators of the plan on which the assessment of the economic activity of the subject is based. It is thanks to the profits that activities are financed for the socio-economic and scientific and technical development of the enterprise and the payroll of employees is increasing. At the same time, it is not only a source to meet the company's existing on-farm needs, but also has a significant influence in the formation of outside / budget resources and charitable foundations. The profit of an enterprise is the money that remains after deducting the cost of processes and taxes.
Specificity
In existing market relations, eachThe company is trying to get the maximum possible profit. At the same time, it should not only be able to firmly hold the sale of its products on the market, but also ensure dynamic development in a competitive environment. Therefore, before you start to produce or provide something, you first study what sales profit can be obtained. An analysis of the potential market is carried out and it is determined how well the task can be achieved. After all, making profit is the main goal of entrepreneurship, the end result of this type of activity. An important task, which is solved in this case, is to obtain the greatest income with minimal costs. This is achieved through a strict economy regime in the matter of spending money and a constant desire to optimize their spending. At the same time, the main source of cash savings is revenue from the sale of goods or services (or more precisely, the part that remains after deducting the amount that is spent on production and sale).
An important aspect
When the profit is distributed from the activity, thenit is divided into consumable and capitalized parts. This moment can be focused on the constituent documents, the interest of the founders or depend on the chosen development strategy of the company. Each organizational and legal form of the enterprise has a legally established mechanism for the allocation of funds, which remained at the disposal of the entity. Its features depend on the internal device, as well as the specifics of the regulation of the company's activities. It should be noted that the state can not directly influence how the profit of the enterprise will be spent. The distribution and use of profits can only be stimulated by certain tax benefits. So, most often in this spirit they talk about innovations, charity, nature protection measures, capital investments and the like.
Balance sheet profit of the enterprise
It is the object of distribution on anyenterprise. By this means the direction of profit for certain articles for use for specific purposes. The law stipulates that part of the profits should go to the budget of the state or local bodies under the guise of taxes or other mandatory payments. Everything else is left to the company itself. So, the enterprise itself decides where to send it most of the profit from sales. The order of distribution of profit and its use is prescribed in the founding documents and certain provisions that are developed by economic and financial services and approved by the manager (owners) or the governing body of the enterprise. How does this process happen? It is better to deal with it, we help to review the current situation at the moment.
What is the basis for the distribution of profits?
- The obligations taken to the state should be fulfilled.
- It is necessary to ensure the material interest of employees in the process of achieving the best results with minimal expenditure;
- We must take care of the accumulation of own capital, through which the process of continuous expansion of business will be ensured;
- It is necessary to fulfill the undertaken obligations to the founders, creditors, investors and other persons.
Example of profit distribution
Now that we have paid attention to the principles onwhich are based on the process under consideration, let's consider the situation with a limited liability company. In this case, taxation and distribution of funds are carried out in a general manner, which is established for legal entities. So, a part of the funds can be directed to the reserve fund, which, according to the law on a limited liability company, must be formed for the timely fulfillment of the obligations undertaken. In the event that one of the founders wants to withdraw their contribution, all of these funds will be paid. In addition, there are accumulation and consumption funds. The first includes the means that in the future will go to the development of the company and various investment projects. That is, profit management provides for the allocation of individual amounts to these areas, which accumulate until the time when the required amount of money. The consumption fund deals with social development, material encouragement and pays to founders certain amounts, proportional to earnings and their contributions.
Economic essence
So, we already considered the profitenterprises, distribution and use of profits in general terms. Now let's pay attention to the theoretical aspects of this topic. So, if we talk about the level of the enterprise, then in terms of commodity-money relations, the net income here is a form of profit. Having established the prices for their products, companies begin to sell it to consumers. At the same time they receive cash proceeds. But this does not necessarily mean profit. To determine the financial results, it is necessary to compare the revenue with the expenses for the production of goods or the provision of services and the amounts for their implementation. Together they take the form of cost. And what to do with these indicators? When the revenue is higher than the cost, then we can say that the financial result confirms the receipt of profit. It should be noted again that it is always the goal for the entrepreneur. But its receipt is not guaranteed. So, if the revenue and prime cost are equal, then only expenses were repaid. In such cases, production, scientific, technical and social development stops. If the expenditure exceeds the revenue, then the enterprise incurs losses. This suggests that he will have a negative financial result a difficult situation, which does not exclude even bankruptcy. In this case, there are various factors of profit, which can say on the final state of affairs. First of all, we should concentrate our attention on the fact that it is necessary to realize profitable products. Also a prerequisite is that the price of goods and services should be higher than the cost price.
What functions does the profit?
As a category of market relations it is:
- Characterizes the economic effect that was obtained as a result of the activities of the enterprise.
- Performs a stimulating effect.In other words, it is both the main element of financial resources in the enterprise, and the performance indicator. This aspect is a very good illustration of the principle of self-financing, the size of implementation of which depends on the amounts received.
- Profit serves as a source of budgets of various levels.
What else can you say?
Separately it is worth noting that they distinguisheconomic and accounting profit. Under the first, the difference between the revenue received and the cost of production is implied. Accounting income is slightly different. It understands the difference between total revenue and only external costs. It should also be noted that in accounting practice there are also slightly different approaches to the analysis of economic activity, under which various types of profit are used: balance sheet, taxable, net, and so on.
Distribution and use
The amount of profit may be different, but the schemesare repeated in different enterprises. The distribution and use of monetary amounts is an important business process that provides coverage for the needs of the people who created the enterprise and form state revenues. The mechanism for channeling funds should be structured in such a way that it fully contributes to maximizing the efficiency of production and sales. The object of distribution is the balance sheet profit. It goes to the budget and goes to specific articles of use.
What principles of profit sharing exist?
So, our article is already coming to its logical conclusion. Accounting for the distribution of profits is simply impossible without regard to certain principles and without violations of the law. So:
- The profit received by the enterprise as a result of its production, economic and / or financial activities is distributed between the company itself and the state.
- In the budget revenues are in the form of fees and taxes. Rates cannot be arbitrarily changed. Their list, the procedure for accrual and transfer is established by law.
- The amount of profit that remains with the enterprise after tax, should not reduce its interest in improving the conduct of activities.
From what remains after the payment of mandatorypayments may be subject to fines and penalties in case of violation of the law. And it should be remembered that the profit that remains at the disposal of the enterprise itself is used in the way it wishes. Neither the state nor individual bodies have the right to interfere in this process and to at least somehow influence it. The only acceptable option is to create conditions for the entrepreneur thanks to the provision of tax benefits. Then the profits from sales will be directed to what is beneficial to the state.
