How to determine the economic profit

You will need
  • Calculator, data on variable and fixed income and expenses.
Economicprofitat the enterprise it is multiplied if the benefits received from the use of long-term resources exceed the costs of obtaining them. In determining the economic profit, the cost of all interest obligations, including interest on loans, is taken into account. Therefore, accountingprofitalways above economic, but precisely economicprofitis a criterion of the efficiency of the enterprise and the use of resources.
The financial result of the enterprise is determined by comparing income and expenses and is expressed as an indicator of economic profit. The calculation of indicators is based on the turnover of the organization.
As a result, if you add up the cost of production, add all the costs of production, costs and the resulting amount to deduct from the amount from the sale of products, the difference will be economicprofitth organization.
The main task of the enterprise is to lead to the maximization of economicprofitthrough the system of costs, use of resources, determining lost income and identifying hidden costs. The calculation of the accounting profit of an enterprise is different in that the implicit costs in the reports are not taken into account.
Looking at the indicators of the marginal income of an organization, one can understand how profitable the increase in output will be.
NetprofitIt is a part of the economic profit remaining after the deduction of taxes, settlement with creditors, charitable contributions, and payment for the rent of land resources and buildings. It is distributed to the needs of the organization: capital accumulation, staff training, replenishment of internal social funds and the income of owners. It also includes extraordinary income and expenses arising from accidents, fires and natural disasters. Insurance claims are extraordinary income.
Related videos
Most often, in real conditions, income satisfaction is working, than maximizing profits.
Helpful advice
The concept of average income is introduced to clarify the economic activity and the characteristics of the results of the enterprise and shows the share of profit per unit of output.

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