Decrease in sales revenue. Sales profit analysis. How to prevent a decrease in sales revenue during a seasonal sales decline
Introduction
.Theoretical foundations for the formation and planning of revenue from product sales 1 The concept and essence of revenue from product sales 1.2 The procedure for generating revenue from product sales 1.3 Planning and distribution of revenue from product sales Analysis of revenue from product sales and its planning at OJSC KOKS 1 Characteristics of the financial and economic activities of OJSC KOKS 2 Analysis of the financial condition of OJSC KOKS 3 Analysis of revenue dynamics and organization of calculation of planned revenue from product sales at OJSC KOKS Ways to increase revenue from product sales 1 Factors aimed at increasing revenue from product sales at OJSC KOKS 2 Basic methods of increasing revenue 3 Justification of the effectiveness of methods for increasing revenue Conclusion List of sources used Appendix A Appendix B INTRODUCTION Sales revenue is the main income of the enterprise, the main source of its cash receipts, reflects the results of the production and economic activities of the enterprise for a certain period of time (year, quarter, month). The relevance of the topic of course work on increasing revenue from product sales and its planning is associated with the need, first of all, for scientific planning and forecasting of financial and economic activities in a market economy. In the future, based on various indicators of its activities, as well as on the basis of plans and forecasts, the organization develops various methods to increase such an indicator as revenue from product sales. The successful financial and economic activities of the enterprise will depend on how accurately the revenue is planned. The calculation of planned revenue must be economically justified, which will allow for timely and complete financing of investments, an increase in own working capital, appropriate payments to workers and employees, as well as timely settlements with the budget, banks, and suppliers. Changes in the volume of sales revenue have a great impact on the financial results of operations and on the financial stability of the enterprise, therefore the financial department of the enterprise organizes daily operational control over the shipment and sale of products. The object of work is OJSC KOKS. The subject of the course work is various methods of increasing revenue from product sales and its planning. The purpose of the course work is to study methods of increasing revenue from product sales and to consider the main features of revenue planning at an enterprise. To achieve the above goal, the following tasks were set and solved: consideration of the concept, the procedure for formation, planning and distribution of revenue from product sales; conduct revenue analysis and planning for the enterprise; consider areas for increasing revenue from sales of products at the enterprise. When writing the course work, the following regulatory documents were used: Civil Code of the Russian Federation. as well as educational literature by such authors as Blank I.A., Gavtrilova A.N., Zbinyakova E.A., Lugovoi A.K. 1.THEORETICAL BASIS OF FORMATION AND PLANNING REVENUE FROM PRODUCT SALES 1.1The concept and essence of revenue from product sales Revenue represents the totality of cash receipts for a certain period from the results of an enterprise’s activities, and is the main source of the formation of its own financial resources. At the same time, the activity of the enterprise can be characterized in several areas: )revenue from core activities coming from sales of products; 2)revenue from investment activities, expressed in the form of financial results from the sale of non-current assets, sale of securities; )revenue from financial activities, including the result of the placement of bonds and shares of the enterprise among investors. As is customary in countries with a market economic system, total revenue consists of revenue in these three areas. However, the main importance in it is given to revenue from the main activity, which determines the entire meaning of the enterprise’s existence. The main source of gross income for an enterprise is revenue from sales of products. Sales of products are the final stage of the circulation of funds of an enterprise, which is of paramount importance for its normal functioning. Sales of products are considered finished products sold to consumers or taken out by them from the warehouses of the manufacturer, in payment for which funds have been fully transferred to the supplier’s account. Revenue from product sales is the most important financial category. It represents the amount of money received into the company’s account for products sold and services provided. Indirect taxes are not included in revenue from sales of products and are accounted for separately. The amount of revenue from product sales depends on the quantity, assortment, quality of products sold, price and payment discipline. The quantity of products sold depends on the volume of production (commercial products) and carryover balances of unsold products at the beginning and end of the sales period (month, quarter, year). The amount of revenue from product sales is influenced by many factors, both dependent and independent of the activities of the enterprise. Directly dependent on the enterprise are: A) volume; b) range; V) quality and competitiveness of manufactured products; G) price level. d) The rhythm of the enterprise's work; e) completeness of products; and) nature of shipment; h) demand for these products; And) forms of payment for products. Working according to schedule contributes to uniform shipment of products and timely receipt of revenue. The release of products that are in demand ensures their full implementation. The use of the most progressive forms of payment for products, the timely issuance of payment documents and their transfer to the bank is an important factor in revenue planning. The product range significantly affects the amount of revenue, since products are not sold at the same prices. Carrying out assortment planning is an indispensable condition for carrying out planning for revenue from product sales. The amount of revenue an enterprise receives from sales of products also depends on the price level: if wholesale prices for products decrease, then revenue from its sales decreases, and vice versa. A) transport disruptions; b) late payment for products due to insolvency of buyers; V) There are gross and net revenues. Gross revenue is the total amount of revenue from the sale of products, works and services, as well as material assets. Net revenue represents gross revenue excluding VAT, excise taxes, price discounts, and the cost of customer returns. The procedure for receipt of proceeds can be made either in cash or non-cash form. Non-cash payments are usually preferred. This is explained by the fact that the use of non-cash payments achieves significant cost savings for their implementation. Thus, revenue from product sales plays a very important role in the financial and economic activities of the organization and is one of the most important sources of the formation of the enterprise’s own resources. 2The procedure for generating revenue from product sales Revenue from sales of products is an important factor in the formation of cash savings of an enterprise. There are two methods for determining it. The first method is that revenue is generated as it is paid: for non-cash payments, as funds for goods are received in accounts, and for cash payments, as funds arrive at the enterprise's cash desk. This method has been used for a long time and is convenient in that the enterprise can manage funds that have actually been deposited in a bank account or in the cash desk of the enterprise. When using the second method, revenue from sales of products is determined as goods are shipped (work, services are performed) or payment documents are presented to the buyer (customer). This method is based on the fact that at the moment the product is shipped, the company loses ownership of it. The method is widely used abroad, where there is a well-functioning system of non-cash payments in a stable economic situation. The second method was approved in Russia relatively recently. The disadvantage of this method is that the proceeds from the sale of products as they are shipped will be taken into account in the financial statements, the enterprise is required to pay taxes, and real funds may arrive in the account for various reasons very late or will not arrive, for example, due to bankruptcy buyer. The enterprise independently chooses the method for determining sales revenue based on business conditions, concluded contracts, and personal tastes. However, the chosen method must be installed for a long time. Revenue from sales of products for any period is determined by the formula: VRpl = Og.p.n. + GP - Og.p.c. (1) In addition to revenue from the sale of products (work, services), enterprises can receive revenue from the sale of fixed and working capital, intangible assets, securities, etc. Currently, enterprises often sell their products through barter or at prices no higher than cost. In these cases, for tax purposes, revenue is taken at the transaction amount based on market sales prices at the time of the transaction. Revenue from the sale of products (works, services) and other property is a source of covering the costs of production and sales of products and generating profit for the enterprise. The concepts of revenue and profit are different, both in economic meaning and in practical reflection. Profit basically reflects the amount of revenue minus all types of costs. But it cannot be said that profit from revenue depends directly proportionally, since there is a so-called operating leverage effect. The effect of operating leverage is that as sales revenue increases, profit grows at a faster rate than revenue. This effect is explained by the fact that the cost structure contains fixed costs. The effect is calculated as the ratio of gross margin to profit. E o.r. = M / P. (2) where E o.r. - operating leverage effect; M - gross margin; P - profit. Gross margin is the difference between revenue and semi-variable expenses. The effect of operating leverage is calculated in times or as a percentage and its value shows how much profit will increase if revenue increases by 1%. Profit is the most important economic indicator of an enterprise’s activity, characterizing the efficiency of its work. Receipt of a larger amount of profit by an enterprise can mean a reduction in production costs and an increase in its profitability. Profit is the most important source of budget revenue. At the enterprise, production and social development is carried out at the expense of profits. Thus, profit is the final financial result of the economic activity of an enterprise. However, the financial result can be not only profit, but also loss, formed, for example, due to excessively high production costs, failure to sell products due to violation of business contracts, etc. The financial result from the sale of fixed assets and other property of the enterprise is made up of profit (losses) from the sale of fixed and working capital, intangible assets, securities, etc. In the process of selling products, the organization faces costs and losses from non-sales operations. These costs include the following: losses from markdown of inventories and finished products; legal fees and arbitration costs; negative exchange rate differences on foreign currency accounts, as well as transactions in foreign currency; other expenses and losses. Thus, a reasonable and competent determination of product costs directly affects the formation of revenue from product sales and, ultimately, the financial result of the organization. This large and important work is one of the main components of financial success in the economic activity of an enterprise. 3Planning and distribution of revenue from sales Revenue planning at an enterprise is necessary to determine the profit plan and planned payments to the budget. The reality of all other financial indicators largely depends on the validity of the calculation of planned revenue. Planned revenue can be calculated in several ways: ) by direct assortment counting (direct counting method); ) based on the total volume of commercial output, adjusted for changes in the balances of unsold products at the beginning and end of the planning period (calculation method); ) factorial method; ) method of summary calculation (extrapolation). Planning of revenue from product sales can be carried out for the coming year, quarter and promptly. Annual revenue planning is possible in a stable economic situation. In an unstable situation, it is difficult and ineffective, so quarterly planning has to be used. Operational revenue planning has a specific goal - control over the timely receipt of money for shipped products to the enterprise account. Total revenue from the main activities of the enterprise includes revenue from sales of products, work performed and services provided of an industrial and non-industrial nature. To determine revenue from product sales, you need to know the volume of product sales in current prices without value added tax, excise taxes and export tariffs for exported products. The first method is used in enterprises with a small range of products and a short production cycle, when there are no carry-over balances of finished products in the warehouse or these balances change slightly over time. Here, the level of development of the product range by type, brand, grade and coordination with customers of their volume and prices for the planned period is of great importance. The direct counting method is based on guaranteed demand. It is assumed that the entire volume of production is accounted for by a pre-issued batch of orders. This is the most reliable method of revenue planning, when the production plan and sales volume are linked in advance to consumer demand, the required assortment and production structure are known, and appropriate prices are set. Under these conditions, sales revenue can be determined by multiplying the volume of products sold by the unit price. In market conditions, most enterprises do not have a guaranteed demand for the entire volume of products produced; enterprises are forced to carry out daily work to expand the market for their products. Under these conditions, the calculation method according to the above formula is used to plan revenue. With this method it is necessary to take into account for the planned year: volume of production; at the beginning of a new period: expected balances of finished products in the warehouse, goods shipped for which payment was not due, goods shipped but not paid on time, goods held in safe custody by buyers; at the end of the period: balances of finished products in the warehouse calculated according to standards, goods shipped, the payment period for which has not yet arrived. The amount of expected balances of finished products at the beginning of the period is taken from reporting data or a forecast based on the actual state of affairs. When determining the carryover balances of finished products at the end of the period in the enterprise's warehouse, it is necessary to analyze the factors, their formation, determine the reasons for excess balances, and establish expected changes in the conditions of sale (changes in the location of consumers, transport, the procedure for non-cash payments). These calculations are made when planning the amount of own working capital for inventories of finished products according to standards. Calculations of balances of finished products shipped, the payment period for which has not yet arrived, or products in custody of buyers are done through analysis and planning of accounts receivable. At high inflation rates, it is necessary to take into account price changes through inflation coefficients. If selling prices do not coincide with the wholesale prices of the enterprise, when drawing up a commodity balance, it is necessary to take into account the difference between selling and wholesale prices to calculate revenue from sales of products: VRpl= Og.p.n.+ GP-Og.p.k.± ∆Р (3) Og.p.n. - balances of finished products at the beginning of the period; GP - release of finished products intended for sale; Og.p.c. - balances of finished products at the end of the period. ∆Р - the difference between wholesale prices and product sales prices due to taxes, discounts or volume changes, due to price changes, etc. Revenue from sales according to the third method is calculated on the basis of actual revenue from sales of products in the base period and those changes that are planned for the upcoming period. The main factors adjusting the volume of revenue are changes: sales volume; structure of products sold; product prices. VRpl = VRbase.xJob.xJstr.xJts. (4) VRbase. - actual sales revenue in the base year; volume. - index of changes in product sales volume; p. - index of structural changes in the range of products sold; c. - index of price changes for products sold. rev.=∑Ts1K1/∑Ts0K0, Jstr.=∑Ts0K1/∑Ts0K0, Jts=∑Ts1K1/∑Ts0K1 (5) Ts0, Ts1 - prices of the base and planned periods, respectively, K0, K1 - quantity of products in the base and planned periods. Revenue from sales of products according to the fourth method is determined by forecasting the rate of growth or decrease in revenue volumes based on their analysis for previous periods of time and expert assessments on maintaining these rates or changing them: VRpl.= VRbase.x K (6) K - coefficient of growth or decline in volumes; To calculate sales revenue for the coming period, a special section of the enterprise’s financial plan is drawn up. Sources of information for determining the actual volume and revenue from product sales are: .schedule for the release of finished products and provision of services; 2.data on the receipt of finished products at the enterprise warehouse on an accrual basis; .data on product shipments on an accrual basis; .refusals to ship products; .remnants of finished products that are not sold; .data on the receipt of funds to the current account and to the cash register for finished products shipped or issued from the warehouse of the enterprise on an accrual basis; .data on products shipped but not paid on time; The proceeds received into the accounts of the enterprise are used primarily to pay bills from suppliers of raw materials, materials, semi-finished products, components, spare parts for repairs, fuel, and energy. From the proceeds, wages are paid, depreciation of fixed assets is compensated, and the profit of the enterprise is formed. The distribution of revenue from product sales is clearly shown in the diagram presented above. From which it is clear that funds from the sale of products are distributed by the organization for various purposes, namely: taxes paid by the organization, wages of workers, dividends. And only the remaining part, after covering all costs, paying taxes and dividends, is subject to distribution by the organization in accordance with its social and production policy. 2.1Characteristics of the financial and economic activities of OJSC KOKS March 1924 Kemerovo coking plant became the first enterprise in Siberia to process coking coal from the Kuznetsk basin. Today, looking at a modern enterprise with advanced technologies and widespread automation, it is difficult to imagine that construction of the plant began during the First World War, during the reign of Nicholas II. Over its long history, the plant has been repeatedly reconstructed and updated its production assets; Many tens of thousands of the best people of different generations living in different centuries have linked their fate with this enterprise. But all of them were united and continue to be united by one thing - pride in their destiny, and therefore in their plant! Currently, the productivity of the main capacities of the joint-stock company is up to 3,100 thousand tons of coke per year. The enterprise includes four main technological workshops: coal preparation, coke and two workshops for the recovery of chemical products of coking. Their work is ensured by repair and auxiliary departments: steam boiler shop, specialized shops for repair of coke-chemical equipment No. 1 and No. 2, electrical shop, metrology and automation shop, motor transport shop, mechanical repair shop, central factory and environmental analytical laboratories. Coke is the main fuel for smelting cast iron in blast furnaces and cupola furnaces - furnaces for melting cast iron in foundries. It is also used in agglomeration, in the production of heat-insulating materials, in non-ferrous metallurgy, etc. Coke on average contains 80-90% carbon, 10-13% ash, 0.5-2% sulfur, up to 0.2% phosphorus, about 1% volatiles, and up to 5% moisture. Its calorific value is 6500-7500 kcal/kg. It is strong enough that it allows the construction of large blast furnaces with a volume of up to 5000 m3. In Russia, about 550 kg of coke is consumed to smelt 1 ton of pig iron. At the same time, the cost of coke is 45-55% of the cost of cast iron. Coke is an expensive and scarce fuel. It is obtained only from certain types of coking coal (coking coal, fatty coal, etc.), the reserves of which account for approximately 10% of all coal reserves. In Russia, methods have been developed for producing metallurgical coke from mixtures containing a significant amount of non-coking coal. By-products of coking are valuable chemicals: benzene, phenols, naphthalene, coal tar, etc., as well as coke oven gas. OJSC "Koks" actually became the founder of a group of companies that grew into an Industrial and Metallurgical Holding with four main production bases - in Siberia, in the center of Russia (Tula region), in the Urals (Sverdlovsk and Chelyabinsk regions) and in Central Europe (Slovenia). The enterprises are united in a production chain - from coal to metal. The authorized capital of the enterprise is 33,004,640 rubles. Location (legal and actual address): 650021, Kemerovo, st. 1st Stakhanovskaya, 6 According to the charter, the main activities of OJSC Koks are: production of coke by processing coal to produce processed products with consumer properties; release of design and technical documentation; production of mechanical engineering, electrical products, metal structures, as well as contract repair work; production of building materials and their sale on the domestic market; production of agricultural products and their sale; organization of public catering; production of consumer goods; capital construction of industrial and social facilities; commercial, sales, trading and intermediary activities; management of industrial enterprises; investment activities; foreign economic activity; housing maintenance services; protection of information constituting state secrets; fire prevention and extinguishing activities; transportation of goods by rail; maintenance and repair of rolling stock and technical equipment used in railway transport; loading and unloading activities in railway transport; provision of public railway transport infrastructure for transportation; transportation of goods along public railways; development of mineral deposits by open and underground methods; processing and sale of mining products; design, construction and operation of mining facilities; construction of underground structures; work associated with increased danger of industrial production and facilities; geological exploration; performing the functions of a general contractor, customer and developer; engineering equipment, networks and systems; medical activities; security and detective activities (for its own needs in order to protect and protect the facilities of the enterprise and its subsidiaries) by creating and using a special separate unit (security service) on the basis of the current norms of federal legislation, as well as departmental and other by-laws; training and advanced training of personnel. Average number of workers: -2639 people. Total number of shareholders (participants): 98 The governing bodies of the company are: .General Meeting of Shareholders; 2.Board of Directors; .management organization .If a liquidation commission is appointed, all functions for managing the affairs of the company are transferred to it. The body of control over the financial and economic activities of the company is the audit commission. The board of directors, general director and audit commission are elected by the general meeting of shareholders. The management organization (manager) is approved by the general meeting of shareholders on the proposal of the board of directors. The functions of the company's counting commission are performed by the company's registrar. In case of voluntary liquidation of the company, the liquidation commission is elected by the general meeting of shareholders; in case of forced liquidation, it is appointed by the court (arbitration court). The company has the following board structure: )The president 2)Vice President )Financial Director )Vice President of Commerce )Executive Director )Managing director )Chief Accountant The financial condition of enterprises is characterized by profit or loss indicators (account 99, chart of accounts). It is known that without making a profit, an enterprise cannot develop in a market economy, with the exception of organizations financed by the state or other sources. Therefore, the task of improving financial results is vital for an economic entity. Analysis of financial indicators allows us to identify opportunities for improving the financial situation and, based on the results of calculations, make economically sound decisions. The main sources of information for analyzing financial results are accounting data and accounting (financial) statements (Appendix A). An analysis of the financial results of the activities of OJSC KOKS is presented below (Table 1). Table 1 Financial results of the activities of OJSC KOKS The decrease in coke production in 2011 was due to a drop in demand due to a reduction in production at Indian steel plants and a decrease in the price of commercial pig iron on world markets. This resulted in lower sales revenue, lower net income and higher expenses. The fulfillment of the plan for commercial products in 2011 compared to 2009 was 102.1%, for product sales - 102.0%. In 2011, the volume of sales of own-produced products amounted to 27,762.6 million rubles, which is 3,222.0 million rubles. or 13.1% more than in 2009. The increase in sales volumes was due to higher coke prices. Sales profit for 2011 compared to 2009 decreased by 408.1 million rubles, including due to a decrease profit from sales of own-produced products - by 384.5 million rubles. profit from the resale of coal concentrate - by 20.4 million rubles. profit from resale of materials - by 0.1 million rubles. A) increase in material costs - by 12563.4 million rubles. b) growth in labor costs with insurance contributions - by 1548.7 million rubles. V) increase in the amount of depreciation - by 1856.2 million rubles. G) increase in sales expenses - by 294.4 million rubles. 2Analysis of the financial condition of OJSC KOKS We will analyze the financial condition of the enterprise using the method of horizontal and vertical analysis of the reporting structure and the method of calculating financial ratios. Based on the asset items of the enterprise, it is necessary to analyze the property status of the enterprise. From the balance sheet of the enterprise (Appendix A) it is clear that the asset in 2009 amounted to 36,922,841 thousand, which is significantly higher than the total in 2010, which amounted to 31,892,271 thousand. The growth rate shows that the asset in 2010 decreased by 13.62% by compared to 2009. But already in 2011, the company increased its assets and the total at the end of 2011 amounted to 36,974,653 thousand, which made it possible to reach the level of 2009 and slightly increase, namely by 0.14% compared to 2009 and by 15.94% compared since 2010. Non-current assets in 2009 at JSC KOKS amounted to 29,848,345 thousand and current assets 7,074,496 thousand; in 2010, non-current assets amounted to 25,485,394 thousand, and current assets amounted to 6,406,877 thousand. As for 2011, non-current assets amounted to 2,477,2415, and current assets 12502238 thousand. We can conclude that the indicators correspond to this organization, since OJSC KOKS is engaged in the extraction and processing of coal and, to a lesser extent, in the sale of products. If we talk about the dynamics of non-current assets from 2009 to 2011, we can say that their number was constantly decreasing: in 2010, compared to 2009, the decrease occurred by 14.62%, and in 2011, compared to 2010, they decreased by 3. 97%. The situation with current assets is slightly better. In 2009, the company had 7,074,496 thousand, which is 9.14% more than in 2010. It can be assumed that the decrease in current assets to 6,406,877 thousand was due to a general decrease in production at the enterprise. In 2011, the number of current assets increases significantly and amounts to 12,502,238 thousand, which is 95.14% more than in 2010. Current assets are growing, and non-current assets are decreasing; this can only indicate that OJSC KOKS has reduced production and directed its activities towards the production and sale of raw materials. Having analyzed the dynamics of non-current assets, we see that their decrease in the period from 2009 to 2011 is due to a decrease in fixed assets, financial investments, and the cost of facilities. Perhaps this happened due to a decrease in production and production volumes at OJSC KOKS. The decrease in current assets in 2010 is associated with a decrease in loans, deposits and foreign currency accounts, which also indicates a decrease in production and production. And then the ratio changed, that is, there is an increase in current assets in 2011 due to accounts receivable, cash and cash accounts, it can be assumed that the buyers of its raw materials paid off the obligations of the organization and part of this money was directed to accounts receivable. The largest share of the enterprise's assets in 2009 was financial investments - 63%, fixed assets - 12%, accounts receivable - 10%. (Figure 2). Figure 2 - Asset structure of OJSC KOKS In 2010 - financial investments - 62%, fixed assets - 13% and other current assets - 13%. (Figure 3). Figure 3 - Asset structure of OJSC KOKS, 2010 As for 2011, the largest share of the enterprise’s assets during this period was: financial investments - 55%, accounts receivable - 30% and fixed assets - 11% (Figure 4). To assess the composition of the sources of financial resources of the OJSC KOKS enterprise, it is necessary to analyze the structure and dynamics of the liability items of the balance sheet of this enterprise (Table A1). Figure 4 - Asset structure of OJSC KOKS, 2011 From the Balance Sheet of the enterprise it is clear that the share of equity capital in 2009 was 39.78% of the total funds of the enterprise, the share of long-term borrowed sources was 29.59%, and short-term borrowed sources - 30.63%. From which it follows that in 2009, equity capital prevailed, and short-term and long-term debt obligations were approximately equal. In 2010, the situation changes, and we observe a decrease in equity capital to 26.18% of the total funds of the enterprise, while the number of long-term loans increases slightly and amounts to 31.33%, and short-term loans grow quite significantly and for this period amount to 42.44%. In 2011, the situation with equity capital leveled out, and at the end of 2011 the share of equity capital reached 35.83%. Which is higher than the share of 2010, but slightly lower than 2009. It should also be noted that the ratio between short-term and long-term borrowed liabilities is changing: long-term liabilities are growing and amounted to 46.80% of total funds at the end of 2011, and short-term liabilities are decreasing to 17.39% of all funds. This may indicate that the company is considering the prerequisites for a gradual increase in coal production and extraction. This will require significant amounts of funds, which the company issues as a long-term loan. Its further development will make it possible to gradually return this loan to the lender. The largest share in the company's liabilities in 2009 was: retained earnings - 35%, long-term borrowed funds - 29% and short-term funds - 23% (Figure 5). In 2010, the same items had the largest share in the liabilities of OJSC KOKS, only their percentage in the liabilities of 2010 changed, with the exception of accounts payable, compared to 2009 and amounted to: retained earnings - 34%, short-term borrowed funds - 28 % and long-term debt obligations - 25% (Figure 6). As for 2011, the same liability items occupied the largest share and the difference was only in percentage as in the previous year. Thus, the largest share in 2011 had: long-term borrowed funds - 47%, retained earnings - 32% and short-term borrowed funds - 11% (Figure 7). Figure 5 - Liability structure of OJSC KOKS, 2009 Figure 6 - Liability structure of OJSC KOKS, 2010 Figure 7 - Liability structure of OJSC KOKS, 2011 Let's conduct a detailed analysis of the structure of equity capital (Table A1). The table shows that the authorized capital was 33,005 thousand rubles. and did not change throughout the entire period from 2009 to 2011. The revaluation of non-current assets in 2009 amounted to 141,164 thousand rubles; in 2010, this figure decreased to 140,636 thousand rubles, that is, there was a decrease of 0.37%. If we analyze the situation with the revaluation of non-current assets in 2011, we can say that the amount of revaluation reaches 139,386 thousand rubles, which decreases by 0.89% compared to 2010 and by 1.26% compared to 2009 year. Additional capital also did not change over three years from 2009 to 2011 and amounted to 1,360,428 thousand rubles. Reserve capital is 5002 thousand rubles. from 2009 to 2011. Regarding retained earnings, we can say that it decreased every year. In 2009 it amounted to 13,148,341 thousand rubles, and in 2010 it decreases by 3.11% and amounts to 12,738,786 thousand. rub.. the same trend in 2010, profit falls another 8.06% and by the end of 2011 amounts to 11,711,560 thousand rubles. Having analyzed equity capital, we can say that equity capital in this organization is decreasing during the analyzed period, namely from 2009 to 2011. Analyzing long-term liabilities, it should be noted that borrowed funds in 2009 amounted to 10,639,312 thousand rubles, in 2010 they decreased by 10.48% and amounted to 9,523,845 thousand rubles, then they increased compared to 2010 by 80.96 % and in 2011, borrowed funds amounted, and throughout the entire period, loans constantly grew, and loans decreased. The situation with deferred tax liabilities was as follows: in 2009 they amounted to 287,335 thousand rubles, in 2010 they increased by 63.19% and amounted to 468,911 thousand rubles, and in 2011 they increased by 14.81% compared to 2010 and amounted to 69,448 thousand rubles. Short-term liabilities changed slightly differently over the years from 2009 to 2011. Borrowed funds in 2009 amounted to 8,375,815 thousand rubles. in 2010 they increased by 24.53% and amounted to 10,430,325 thousand rubles; in 2011, borrowed funds decreased by 60.61% compared to 2010 and amounted to 4,109,001 thousand rubles at the end of 2011. it is worth noting. That the decrease occurred in both loans and borrowings at the same time. Accounts payable in 2009 amounted to 2883953 thousand rubles, in 2010 - 3027019 thousand rubles, which is 4.96% more. In 2011, it decreases by 25.42% compared to 2010 and by 21.72% compared to 2009, which indicates the positive dynamics of the enterprise in this aspect. Deferred income in 2009 is 77 thousand rubles, and in 2010 - 505 thousand rubles, which is 555.84% more, and in 2011 they decreased by 4.55% compared to 2010, and amounted to 482 thousand rubles. estimated liabilities grow slightly every year and amount to 44,164 thousand rubles in 2009, 47,827 thousand rubles in 2010, and 54,125 thousand rubles in 2011. In general, based on the analysis of the balance sheet structure, we can conclude that assets and liabilities in 2010 decreased significantly compared to 2009 (by 13.62%), which was associated with a decrease in such items: fixed assets, financial investments and cash funds on the asset side of the balance sheet and accounts payable and retained earnings on the liability side of the balance sheet. This may be due to a reduction in production, which resulted in a decrease in retained earnings. Also, retained earnings could be affected by various factors, such as a decrease in product prices, for example, a decrease in accounts payable shows the positive dynamics of the enterprise in this direction. To characterize the financial results of an enterprise, it is necessary to analyze the items in the profit and loss statement (Table 1). Table 1 Profit and loss statement of OJSC KOKS Name 2009 2010 2011 Revenue - 31,077 53,126,877,251 Cost of sales - 23,213,77,417,898,105 Gross profit (loss) - 7,863,7578,979,146 Selling expenses - 4,250,4533,184,538 Administrative expenses-768 980768 125 Profit (loss) from sales 3 252 4365 026 4832 844 324 Revenue from participation in other organizations 546 2511 681 87642 797 Interest receivable - 191 664 267 515 Interest payable - 1 607 8681 971 366 Other income - 21 918 44813 214 441 Other expenses 785 65526 538 25615 017 414 Profit (loss) before tax2 466 8521 509 8121 562 456 Current income tax91 752-401 479 including permanent tax liabilities-235 667270 079Change in deferred tax liabilities-10 514181 702Change in deferred tax assets-76 809128Other-406 7207 217Net profit (loss)2 161 6811 036 797971 930 Revenue in 2010 amounted to 31,077,531 thousand rubles. and in 2011 it decreased by 4,200,280 thousand rubles. and amounted to 26877251 thousand rubles. (Figure 8). The cost in 2010 amounted to 23,213,774 thousand rubles, and in 2011 17,898,105 thousand rubles. (Figure 8). Figure 8 - Dynamics of financial results for 2010-2011 Gross profit is growing and in 2011 amounted to 8,979,146 thousand rubles, and in 2010 it amounted to 7,863,757 thousand rubles. insignificant, but growth is observed. Commercial expenses decrease from 4250453 thousand rubles. in 2010 to 3184538 thousand rubles. in 2011, which indicates the positive dynamics of the enterprise in relation to business expenses. Management expenses change slightly, decreasing in 2011: in 2010 they amounted to 768,980 thousand rubles. and in 2011 768,125 thousand rubles. The situation with profit from sales is somewhat different; at first it decreases to 2844324 thousand rubles. in 2010 compared to 2009 - 3252436 thousand rubles, but then in 2011 it increases and reaches 5026483 thousand rubles, which may also indicate the positive dynamics of the enterprise. Income from participation in other organizations grows sharply in 2010 (1,681,876 thousand rubles) when compared with 2009 (546,251 thousand rubles), but already in 2011 there is a sharp decline in this indicator (42,797 thousand rubles). Interest receivable in 2010 is 191,664 thousand rubles, in 2011 they increase by 75,851 thousand rubles. and amounted to 267,515 thousand rubles at the end of the year. As a percentage payable, there is a slight increase in 2011 - 1,971,366 thousand rubles, compared to 2010 - 1,607,868 thousand rubles. This situation is not the best for OJSC KOKS, since the interest payable significantly exceeds the interest received. Other income decreases significantly in 2011 to 13,214,441 thousand rubles. from 21918448 thousand rubles. in 2010 year. On the contrary, other expenses increase to 15,017,414 thousand rubles. in 2011. Although in 2009 they totaled only 785,655 thousand rubles, and in 2010 - 26,538,256 thousand rubles. Expenses significantly exceed income, which does not have a favorable effect on the operation of the enterprise. Profit before tax had the following changes: in 2009 it amounted to 2,466,852 thousand rubles. In 2010 - 1,509,812 thousand rubles, which is already 957,040 thousand rubles. less than in 2009. And finally, in 2011 it exceeded the 2010 figure by 52,644 thousand rubles. and amounted to 1,562,456 thousand rubles. current income taxes have been trending upward. So in 2009 it amounted to 91,752 thousand rubles, then in 2011 - 401,479 thousand rubles. The change in deferred tax liabilities, on the contrary, had the potential to increase, so in 2010 it amounted to 10,514 thousand rubles, but a year later, at the end of 2011, it amounted to 181,702 thousand rubles. As for the change in deferred tax assets, we can talk about a significant decrease in this indicator, since in 2010 it amounted to 76,809 thousand rubles. and in 2011 - 128 thousand rubles. The result of financial results is net profit. It has a negative growth rate, that is, it is decreasing every year. If in 2009 this figure was 2,161,681 thousand rubles, then by the end of 2010 it decreased by 1,124,884 thousand rubles. and amounted to 1,036,797 thousand rubles. and at the end of 2011 it drops to 971,930 thousand rubles. Figure 9 - Profit dynamics of OJSC KOKS Having forecast changes in profit for 2012-2014 using the extrapolation method, we can conclude that profit has decreased. And significant. Based on the data from 2009 - 2011 and how quickly it decreased, it can be predicted that OJSC KOKS will receive even less profit in 2012-2013, and in 2014 the profit will be zero and the enterprise will close if the necessary measures are not taken by the managers of this company. organizations. Perhaps this situation has developed this way due to lower prices on the market and demand for OJSC KOKS products in general, as well as a reduction in production. To get out of this situation, the management of this organization needs to plan all its activities taking into account the forecast of analysts and market researchers. Also introduce new technologies in production to reduce production costs, thus reducing the price of their products and increasing demand for them, but a very important condition is maintaining the enterprise and production in the volumes in which it exists. Try to build production in such a way that it does not decline during this difficult period for the organization and, if possible, grows. We will analyze the solvency of the enterprise, because it shows the organization's ability to pay its debts. The calculation results characterizing the solvency of the enterprise are presented in Table 2. table 2 Analysis of solvency assessment Name of the coefficient 2009 2010 2011 Absolute liquidity ratio 0.00120.00800.0008 Current liquidity ratio 0.62560.47281.9440 Share of working capital in assets 0.19160.20090.3381 Share of inventories in current assets 0.10250.14590.0 711Mobility of own working capital-0.0032-0 .01510.0008 Average monthly revenue - 25897942239771 Share of cash in revenue - 0.00350.0002 Overall degree of solvency - 9.090510.5972 Debt ratio for bank loans and loans - 7.70499.5293 Debt ratio to other organizations - 1.89650.6 114 Debt ratio to the fiscal system- 0.10580.0397 Internal debt ratio - 0.04530.0195 The first indicator characterizing the solvency of an enterprise is the absolute liquidity ratio. It shows how much of the organization's current liabilities can be paid with cash. According to calculations, the absolute liquidity ratio in 2009 is equal to 0.0012, which indicates that the enterprise OJSC KOKS can repay only 1.2% of its obligations in cash. In 2010, the situation is slightly changing, but this indicator is equal to 0.008, that is, the company can already pay off its obligations with cash at 8%, which cannot be said about this indicator in 2011, it is equal to 0.0008. Liquidity is very low and at the end of 2011 the portion of liabilities that can be repaid in cash is only 0.8%. The next indicator is the current liquidity ratio, which characterizes the ability of an enterprise to pay off debts with all the resources of the enterprise available in circulation. In 2009, it is 0.6256, that is, the company can pay 62.56% of its short-term obligations with all the resources in circulation. Since this ratio is less than 1, this indicates that the company does not have enough working capital to meet its obligations. In 2010, the current liquidity ratio was 0.4728, and at the end of 2011 it increased significantly and amounted to 1.944, which indicates the company’s ability to meet its obligations. One of the indicators of solvency is the indicator of the share of working capital in assets, which characterizes the presence of liquid assets as part of the property of the enterprise. In 2009, it amounted to 0.1916, which indicates that the company’s property contains 19.16% of liquid assets. This does not correspond to the activities of the enterprise, because OJSC KOKS is engaged in the extraction and processing of raw coal and the share of liquid assets should be larger. In 2010, there was a slight increase in the share of working capital in the asset; it amounted to 20.09%. And in 2011, liquid assets are growing again (33.81%), which indicates that the organization has increased the share of liquid assets in its property in order to pay its obligations. The share of inventories in current assets characterizes the qualitative composition of current assets at the enterprise. In 2009, this figure was 0.1025, which indicates that the share of inventories in current assets was 10.25%. Which corresponds to the enterprise OJSC KOKS. In 2010, this figure increases to 14.59%. And in 2011 it decreases below the 2009 figure and amounts to 7.11%. The mobility of own working capital shows the share of cash in the own working capital of the enterprise. In 2009 and 2010, these coefficients are negative and amount to - 0.0032 and - 0.0151 - this indicates a decrease in the share of cash in own working capital, which is extremely unfavorable for the organization’s activities. In 2011, this indicator increases and amounts to 0.0008. It also remains at a low level, but is no longer negative, which indicates a positive trend for the organization of JSC KOKS. financial planning revenue sales Average monthly revenue shows the average revenue received by an organization per month. In 2010, this revenue amounted to 2,589,794 thousand rubles; in 2011, average monthly revenue decreased by 350,023 thousand rubles. and amounted to 2,239,771 thousand rubles at the end of 2011. This trend is not favorable for the enterprise, so you should pay attention to an increase in this indicator at least to the 2010 level. The share of cash in revenue shows the qualitative composition of revenue. In 2010, the share of cash was 3.5%, and the remaining 96.5% was accounts receivable. In 2011, the share of cash in revenue decreases even further and amounts to 0.2%, that is, almost all revenue consists of accounts receivable. This situation is critical for the enterprise, since the ability of the organization to timely fulfill its obligations, including the execution of mandatory payments to budgets and extra-budgetary funds, largely depends on the value of this indicator, and the value of this indicator, as we have seen, is very low. The overall degree of solvency characterizes the general situation with the organization’s solvency, the volume of its borrowed funds and the timing of possible repayment of the organization’s debt to its creditors. In 2010, the company could pay off its obligations in 9.09 months. In 2011, the situation is not changing for the better and the company can pay off its obligations only after 10.59 months, which indicates a decrease in the liquidity of the company to pay its obligations using revenue. The debt ratio on bank loans and loans characterizes the possibility of covering debt on bank loans and loans with the amount of revenue received from sales. It determines the average time frame within which an enterprise can pay its creditors, provided that average monthly revenue is maintained, if no current expenses are incurred, and all proceeds are used for settlements with creditors. In 2010, this coefficient was 7.7 months, and in 2011 - 9.53 months. The trend is towards an increase in the period of settlement with the company’s creditors, which also indicates a decrease in the liquidity of the company to pay on loans and borrowings. The debt ratio to the fiscal system shows the period during which the organization can repay its debt to the budget. In 2010, this period was equal to 0.1 month, and in 2011 this period is reduced to 0.04 months. It follows from this that the liquidity of the enterprise to repay its debt to the budget increases. The internal debt ratio characterizes the overall level of solvency and turnover of amounts for the internal obligations of the enterprise. Table 2 shows that in 2009 it was equal to 0.0453. And in 2011 it was 0.0195. We see that the internal debt ratio of OJSC KOKS in 2011 decreased compared to the level of last year, which indicates an improvement in the level of solvency of the enterprise under study and a decrease in the turnover of amounts for its internal obligations. To characterize the enterprise's dependence on external sources of financing, it is necessary to analyze the financial stability of the enterprise. The financial stability of the enterprise is shown in Table 3. Table 3 Financial stability analysis Name of the coefficient 2009 2010 2011 Debt to equity ratio 1.51382.81951.7914 Maneuverability of own working capital - 0.2882-0.85550.4582 Share of current liabilities in the balance sheet 0.30630.42490.1739 Share of borrowed capital in the balance sheet 0.60220.73 820, 6419 Financial stability coefficient 0.39780.26180.3583 Autonomy coefficient 0.39780.26180.3583 The first indicator - the ratio of borrowed and equity funds - refers to the coefficients of the financial stability of the enterprise. Shows how much borrowed funds are available per 1 ruble. own funds. In 2009, for every ruble of invested own funds there were 1.51 rubles, in 2010. already -2.81 rubles, which again indicates an increase in the financial dependence of the enterprise, although in 2011 a positive trend emerged - the value of the indicator returned to the level of 1.79 rubles. The coefficient of maneuverability of own working capital shows what part of own working capital is in circulation, i.e. in the form that allows you to freely maneuver these funds, and which is capitalized. The value of this ratio should be high enough to provide flexibility in the use of the enterprise's own funds. At OAO KOKS, this indicator in 2009 was -0.29, in 2010 - -0.86, and only in 2011 did it take a positive value and amounted to 0.46. For the first two years, the agility coefficient has a negative value as a result of the presence of a large share of hard-to-sell assets in the total amount of equity capital. And already in the last year it has been approaching its normal value of 0.5. The share of current liabilities in the balance sheet shows what share current liabilities make up in the company's liabilities. In 2009, this figure at OJSC KOKS was 0.31, in 2010 - 0.43, in 2011 - 0.17. As we see, there is a decrease in current liabilities. The share of borrowed capital in the balance sheet shows what percentage of the organization's capital consists of borrowed funds. In 2009, the share of borrowed capital at OJSC KOKS was 60%, in 2010 there was an increase in borrowed capital to 73%, and in 2011 its share decreased to 64%, which indicates a positive trend if this indicator decreases in the future . The financial stability ratio shows the share of the company's assets financed by its own capital. At OJSC KOKS this figure is significantly less than the recommended standard (0.5-0.7). In 2009 it was only 0.4, in 2010 - 0.26, and in 2011 - 0.34, which indicates a small share of assets financed from own funds. The autonomy coefficient shows the share of the enterprise's assets that are provided with its own funds. This indicator at OAO KOKS in 2009 was 0.39, in 2010 it decreased to 0.26, and in 2011 it increased compared to 2010, but did not reach the level of 2009 and amounted to 0.36. The higher the value of the coefficient, the more the enterprise is financially stable and the less dependent on third-party loans. Considering this enterprise, one cannot speak of its good financial stability; moreover, these coefficient values indicate the risk of losing investments made in the enterprise and loans provided to it, which does not attract investors and creditors. To assess the efficiency of using the resources available to the enterprise, it is necessary to conduct an analysis of business activity (Table 4). Table 4 Business activity analysis Name of indicator 2009 2010 2011 Sales revenue - 31,077 53126 877 251 Net profit - 23 213 77417 898 105 Payment revenue --- Labor productivity --- Resource productivity - 0.97450.7269 Material turnover ratio - 41.117633 ,8914Material turnover period-8, 755410.62222222222222222222222222222222583,1345 circle of turnover of finished products (in days) -1.50270.6174OOODRAGE OF receivables (in revolutions) -1,32011,1324 WORK 272,7144317.9156OOODICALLY OF RAMS (B to revolutions ) -2.29364.1791 Turnover period of current capital - 156.959086.1424 To characterize the financial results of an enterprise, it is necessary to analyze the enterprise's revenue. Sales revenue in 2010 amounted to 31,077,531 thousand rubles, but a year later it decreased to 26,877,251 thousand rubles. Net profit characterizes the funds remaining in the accounts of the enterprise after taxation and payment of all mandatory payments. At the end of 2010, the net profit of OJSC KOKS amounted to 263,213,774 thousand rubles. Since sales revenue decreased, we can see a decrease in net profit, that is, in 2011 it amounted to 17,898,105 thousand rubles, which is significantly lower than this figure in 2010. Resource productivity characterizes the efficiency of using all the property at the disposal of the enterprise and reflects how many rubles of revenue are received per ruble of funds invested in the property. In 2010, this indicator at OJSC KOKS was equal to 0.97, that is, for every invested ruble the enterprise receives 0.97 rubles, and in 2011 this indicator decreases to 0.72, that is, for every invested ruble the enterprise receives 0.97 rubles. receives 0.72 rubles. This trend at OJSC KOKS is observed due to a general decrease in revenue without a proportional decrease in property. This does not correspond to the activities of the enterprise, and the management of this organization needs to take measures to stop the decline in revenue and direct its activities to increase revenue from product sales. The materials turnover ratio shows how many times per year the costs of purchasing materials are covered from revenue, how many times per year the company covers the costs of purchasing materials from revenue. This indicator in 2010 was 41.12, which indicates that the company covered the costs of purchasing materials from revenue 41.12 times a year. In 2011, the situation with this indicator worsened somewhat and at the end of the year it amounted to 33.89, that is, 33.89 times the company covered the costs of purchasing materials from revenue. The decrease in the ratio is primarily due to a decrease in the enterprise's revenue itself. The turnover period of materials characterizes the period during which the costs of purchasing materials are recouped. In 2010, this figure was equal to 8.76, so the cost of purchasing materials pays off in 8.76 days, and in 2011 the cost of purchasing materials pays off in 10.62 days, which indicates its decrease. This occurs due to the fact that revenue falls more slowly than materials in the enterprise. Finished product turnover shows the turnover rate of finished products at a given enterprise, i.e. how many times the asset in question “turned around” during the period. In 2011, turnover increases sharply compared to 2010, where turnover was 239.58 times, and reads 583.13 times per year, due to a decrease in demand for products of KOKS OJSC, perhaps this is due to the use of new types of resources, more useful to them, the consumers. A decrease in the turnover ratio over time indicates a decrease in the efficiency of using property from the point of view of generating income (profit). The turnaround time for finished products determines the turnaround time for finished products. In 2010 it was 1.5 days, and in 2011 this figure decreased to 0.62 days. The accounts receivable turnover ratio shows how many times accounts receivable are turned over per year. In 2010, the turnover at JSC KOKS was 1.32 turnover per year, and in 2011 it was 1.13. As we see, there was not a big decrease in this indicator; this may indicate an increase in the number of insolvent clients and other sales problems, but it may may also be associated with the company’s transition to a softer policy of customer relations aimed at expanding market share. The accounts receivable turnover period shows how many days it takes on average to pay accounts receivable. In 2010, the turnover of accounts receivable occurred in 272.71 days; in 2011, the turnover period increased to 317.92 days. Reducing the receivables turnover period means reducing the debt payment period. The turnover of current liabilities shows the rate of turnover of current liabilities at a given enterprise. In 2010, the turnover rate of current liabilities was 2.29 turnovers per year, then this indicator increases, that is, the rate increases to 4.18 turnovers in 2011. The growth of the indicator indicates an increase in the speed of debt payment. The turnover period of current liabilities shows the average period for repayment of debts on current liabilities. In 2010, the turnover of current liabilities amounted to 156.96 days, and in 2011 it decreases to 86.14 days. This suggests that the enterprise has a positive trend; this may indicate an improvement in terms of payment for services under contracts, financial difficulties among consumers, and an increase in the efficiency of the enterprise itself. To assess the profitability of an enterprise, it is necessary to analyze and evaluate the efficiency of resource use (Table 5). Table 5 Analysis of efficient use of resources Indicator name 2009 2010 2011 Return on assets (in %) 5,853,252,63 Profitability of product sales (in %) - 9,1518,70 Profitability of core activities (in %) - 12,2528,08 Return on equity (in %) 14,7212,427,34 Average monthly revenue per employee --- Investment activity coefficient 3,683,233.68 Return on assets shows the effectiveness of using the capital invested in the company's property - fixed and working capital. This figure is quite low and amounted to 5.58% in 2009, then it halved and in 2010 it amounted to 3.25%, by the end of 2011 it dropped to 2.63%. This can be explained by borrowing funds for production. The profitability of product sales shows how much profit each ruble of the cost of products sold gives. In 2010, this figure was 9.15%, and a year later it almost doubled and by the end of 2010 reached 18.7%. This happened due to an increase in the amount of profit from the sale of products and a decrease in its cost. Profitability of core activities. Shows how much profit the company makes from each ruble spent on the production and sale of products. In 2010, the profitability of core activities at OJSC KOKS was 12.25%, and in 2011 this figure more than doubled and amounted to 28.08%. An increase in this ratio reflects an increase in the profitability of core activities and means an improvement in the financial condition of the enterprise. The return on equity ratio characterizes the efficiency of use of capital and shows how much net profit the enterprise has per ruble advanced in capital. This indicator had the following trend: in 2009 it was 14.72%. Then in 2010 it decreased to 12.42%, and in 2011 there was a reduction to 7.34%. Return on equity has decreased, which indicates a reduction in the return on equity. This is most likely due to the fact that the share of hard-to-sell and slow-to-sell assets, which cannot give a quick return, has increased in the composition of the enterprise's assets. Thus, inventories will turn into income only after passing through the stage of production and circulation (sales); fixed assets create conditions or are directly involved in the production process and do not directly provide income. The investment activity coefficient characterizes investment activity and determines the amount of funds allocated by the organization for modification and improvement of property and for financial investments in other organizations. This coefficient is practically at the same level for 3 analyzed years. In 2009 and 2011 it amounted to 3.68%, and only in 2010 it decreased slightly to 3.23%. That is, in 2010 the amount of funds allocated by the organization for investments in other organizations was reduced. Thus, after analyzing we can draw the following conclusions: )The balance sheet currency of the enterprise for the analyzed period increased by 51,812 thousand rubles. or by 0.14%, which may indirectly indicate a slight expansion of economic turnover; 2)The presence of net profit at the enterprise in the analyzed period indicates an available source of replenishment of working capital; )The enterprise's return on equity is low, which indicates insufficient efficiency of its activities; )The level of borrowed capital is so high that the enterprise is heavily dependent on debt, which means there is a high risk of its insolvency if interruptions in the flow of income occur; )The repayment terms of accounts receivable are increasing, which indicates a deterioration in the business activity of the enterprise. 3Analysis of revenue dynamics and organization of calculation of planned revenue from product sales at OJSC KOKS Due to the current economic conditions, studying the dynamics of sales revenue is currently the main task of economic analysis of the volume of activity of any business entity. In order to analyze the dynamics of revenue, it is necessary to determine deviations in the sales of each type of product of the enterprise (Table 6). Table 6 Dynamics of revenue from sales of various types of products 2010 thousand rubles 2011 thousand rubles Absolute deviation thousand rubles Relative deviation % Sales of coke and coke products 1206521510523641- 1541574- 12.8 Sales of cast iron 8542178945218791000910.7 Sales of coal and coal concentrate 9458762 5821873- 3636889- 38.4 Sales of cast iron products 548632496548- 52084- 9.5 Sales of powder metallurgy products 24176236798712622552.2 Sales of crushed cast iron 134965147482125179.3 Other sales 8601767533- 18484- 21.5 Total sales revenue 3107753126877251- 420028 0- 13.5 Based on Table 6, it can be seen that revenue as a whole decreased at the enterprise compared to the same period by 4,200,280 thousand rubles, and the relative deviation was 13.5%. In turn, revenue from sales of coke and coke products decreased by 1,541,574 thousand rubles. compared to the previous year, the relative deviation was 12.8%, and revenue from the sale of cast iron increased in 2011 compared to 2010 by 910,009 thousand rubles, and there was also an increase in revenue from the sale of powder metallurgy products by 126,225 thousand rubles. in 2011 compared to 2010 and crushed iron by 12,517 thousand rubles. As for the change in revenue from the sale of coal and coal concentrate, it decreased in 2011 compared to 2010 by 3,636,889 thousand rubles, which amounted to 38.4%. A downward trend in revenue was also observed from the sale of cast iron products from 548,632 thousand rubles. in 2010 to 496,548 thousand rubles. in 2011, which amounted to 9.5%, as well as from other sales. It decreased in 2011 compared to 2010 by 18,484 thousand rubles, which amounted to 21.5%. Based on the analysis of revenue dynamics, we can say that OJSC KOKS has both positive and negative dynamics of revenue from product sales, but in general the total revenue has a negative dynamics, which indicates abnormal development of the organization’s economy. The main reasons for the drop in revenue from product sales could be: A) untimely conclusion (extension, revision of existing) contracts with potential buyers for the supply of products; b) violation of contractual obligations regarding the volume, range, quality of supplied products, shipment dates and other delivery conditions; V) the buyer’s refusal to receive products on time, including due to the accumulation of excess and excess inventory; G) insufficient (incomplete, incompetent) study of consumer demand in the serviced area; d) failure to develop a potential sales market; e) lack of supplies of finished products in the required volume, range, quality to fulfill current contractual obligations and urgent orders (lack of safety stock), etc. In the process of financial and economic activities, the financial services of an enterprise can plan revenue for the coming year, quarter and promptly. Annual revenue planning is effective in a stable economic situation. In conditions of instability, when the relationship between supply and demand is confirmed by changes that are difficult to predict and the legally established rules of conduct for legal entities are constantly changing, annual planning is difficult and is not an objective guideline for the enterprise. In such a situation, quarterly planning is more appropriate. The most common method is the direct calculation of planned revenue from product sales. This is exactly the method used at OJSC KOKS. Let's consider how this organization plans revenue for the coming periods based on existing sales volumes and product prices. Since not all commercial products (TP) produced in a given period are sold, when planning sales revenue, the volumes of carryover balances at the beginning (O1) and end (O2) of the planning period are also taken into account, as a result of which the planned sales volume (Vp) is calculated according to following formula: VP = O1 + TP - O2. (7) In Table 7 we can see how revenue from product sales is calculated by direct payment to OJSC KOKS. Table 7 Calculation of revenue from product sales Name of products Remains at the beginning of the year, million tons. Production plan, million tons. Remains at the end of the year, million tons. Sales volume, million tons. Cost in selling prices. Tonnes of products, million rubles. Total sales volume. million rubles Coking coal 0.41.20.31.30.01213878 Coke 0.22.70.12.80.00195320 Cast iron 0.84.30.64.50.00731500 Iron ore concentrate 0.62.30.52.40.00122880 Coal 0.51, 10.31.30.0022600Total: 56178 Thus, we can summarize that revenue from sales of products is one of the main sources of reimbursement of funds for the production and sale of products, the formation of income and the formation of financial resources. In a market economy, sales volumes and revenues are given a special place. Not only internal production reimbursement of costs and profit generation, but also the timeliness and completeness of tax payments and repayment of bank loans depend on the amount of revenue, which ultimately affects the financial result of the enterprise. 3.WAYS TO INCREASE REVENUE FROM PRODUCT SALES The amount of revenue from product sales is influenced by many factors, both dependent and independent of the activities of the enterprise, and OJSC KOKS is no exception. Factors directly dependent on the enterprise are: · volume · range · quality and competitiveness of manufactured products · price level Product output mainly determines the volume of product sales: with an increase in its output, the sales volume increases, and vice versa. In addition, the amount of revenue depends on: · rhythm of the enterprise's work · completeness of products · nature of shipment · demand for this product · forms of payment for products Working according to schedule contributes to uniform shipment of products and timely receipt of revenue. The release of products that are in demand ensures their full implementation. The use of the most progressive forms of payment for products, the timely issuance of payment documents and their transfer to the bank is an important factor in revenue planning. The product range significantly affects the amount of revenue, since products are not sold at the same prices. Carrying out assortment planning is an indispensable condition for carrying out planning for revenue from product sales. The amount of revenue an enterprise receives from sales of products also depends on the price level: if wholesale prices for products decrease, then revenue from its sales decreases, and vice versa. Factors beyond the control of the enterprise include: · transport disruptions · late payment for products due to insolvency of buyers · delays in bank payments, etc. In a market economy, the revenue of any commercial enterprise, and in particular OJSC KOKS, largely depends on the correct determination of prices for the goods and services sold, which primarily depends on the financial service of the enterprise. Currently, the pricing system is essentially reduced to the use of free, i.e. market prices, the value of which is determined by supply and demand. The price of products, as a rule, includes a certain level of profitability. But sometimes unprofitable prices (the so-called penetration prices) are used in order to displace competitors, expand sales markets and in the expectation that the enterprise's subsequent losses will be compensated by reorienting consumer demand for its products. State price regulation is used for a narrow range of goods produced by monopoly enterprises. Both free and regulated prices can be wholesale (sale) and retail. The wholesale price of an enterprise includes the full cost of production and the profit of the enterprise. At the enterprise's wholesale prices, the products are sold to other enterprises or trade and sales organizations. The retail price includes the wholesale price and a trade markup (discount). Thus, the level of free and regulated prices is the most important factor influencing revenue from sales of products, and, consequently, the amount of profit. All enterprises, except those that sell standardized products in markets with a high level of competition, have a certain degree of freedom in setting prices for their products and therefore independently choose a pricing policy, for which the financial service of the enterprise is responsible. The volume of sales revenue depends on the choice of product pricing strategy. The pricing policy at an enterprise in market conditions is developed taking into account production costs, supply and demand of products, competition in sales markets, and the influence of government regulation. Therefore, the company first sets the initial price and then adjusts it taking into account current external market factors. Price is a monetary expression of the value and use value of a product, so it not only reflects internal and external factors of production, but influences them. When generating revenue from product sales, price performs several functions · accounting, as it serves as a means of accounting for revenue from sales of products, costs of production and sales of products, production efficiency; · stimulating, since high prices stimulate the production of specific products; · distributive, since the deviation of the price for the products of a given enterprise from the average prevailing prices reflects the direction of distribution of profits either in favor of the manufacturer or in favor of the consumer. With the help of prices, income is redistributed between enterprises, industries, and regions; · regulating, i.e. supply and demand for specific products and the law of monetary circulation are taken into account, competition equalizes prices and marginal production costs, and allows for efficient use of resources. From the above, we can conclude that there are a lot of factors influencing the revenue from sales of products at OJSC KOKS and the enterprise must constantly monitor changes in one or another factor. Apply various calculations at the present time and, based on the results obtained, make forecasts for the future in order to increase your revenue from product sales and direct it to expand production. 3.2Basic methods of increasing revenue In market conditions, an enterprise must strive, if not to obtain maximum profit, then at least to the amount of profit that would allow it not only to firmly maintain its position in the market for the sale of its goods and services, but also to ensure the dynamic development of its production in a competitive environment. Ultimately, this involves knowing the sources of profit and finding ways to best use them. Considering profit as an economic category, we talk about it in the abstract. But when planning and assessing the economic and financial activities of an enterprise, and distributing the profits remaining at the disposal of the enterprise, specific indicators are used. Everyone knows that profit is the positive difference between revenue and costs. Considering the situation with the OAO KOKS enterprise, it should be said that this enterprise urgently needs to use various methods to increase its revenue from product sales, since revenue from product sales is falling. Consequently, the company can barely cover its costs, let alone expand its production. Methods for increasing revenue from product sales may be different, depending on the activities of the enterprise. As for the organization OJSC KOKS, it should be noted that it is engaged in the production and sale of products to the final buyer, so we will consider the main methods of increasing revenue from product sales characteristic of this enterprise (Figure 9). In the figure we can see that some methods, regardless of anything, can increase profits, such as increasing the volume of product sales and reducing production costs, and a method such as increasing prices will only be effective if other methods are applied, namely to to increase the price, it is necessary to improve the quality of the product, since a competitive market can displace this agent. Figure 9. Scheme of methods for increasing revenue from product sales Also, to increase prices, it is necessary to search for more profitable markets, which is very difficult to do in conditions of market competition. And the last method presented in the table, leading to higher prices for products, is sales in a more optimal time frame. It can also be noted that, along with these methods, there is an important method for reducing the costs of production and sales of these products, reducing production costs. Let's consider how an increase in the volume of product sales affects the increase in sales revenue. To do this, we need to see the change in sales volumes in 2011 compared to 2010 and then monitor the situation; if the company’s sales volume increases in the future, how will this affect sales revenue, undoubtedly it will grow, we will prove this with calculations. To determine the impact of sales volume on profit, it is necessary to multiply the profit of the previous period by the change in sales volume. The proceeds from the sale of goods of the enterprise in 2011 amounted to 26,877,251 thousand rubles. First, it is necessary to determine the volume of sales in basic prices, for this we divide the revenue by the price index, which was 1.27 in 2011: : 1.27 = 21163149.8 thousand rubles. Taking this into account, the change in sales volume for the analyzed period was: (21163149,8: 31077531)*100% =68,1%
those. There was a decrease in the volume of products sold by 37.9%. Due to a decrease in product sales, profit from the sale of products, works, and services decreased: * (-0.379) = -1905037.06 thousand rubles. If the volume of products sold increases in the subsequent year 2011, for example by 10%, revenue from product sales will increase and amount to: (2844324 * 0.1) + 2844324 = 3128756.4 thousand rubles All presented methods directly affect the amount of revenue, and what activities to carry out at the enterprise are decided by managers together with the chief accountant and economist. It is necessary to take into account all the nuances of the enterprise and have relevant information on the state of the sales and consumer markets on the day of discussion of problems and decision-making, as well as on the state of affairs and activities of other competing enterprises. 3Justification of the effectiveness of methods for increasing revenue Each enterprise has specially trained people who constantly analyze costs and look for ways to reduce them in order to increase profits. But to a large extent this work is ensured by inflation and rising prices for raw materials and fuel and energy resources. In conditions of sharp rise in prices and lack of own working capital for enterprises, the possibility of increasing profits as a result of lowering costs is excluded. Let's consider the effectiveness of the above methods for increasing revenue from product sales at OJSC KOKS. An increase in the volume of product sales in physical terms, other things being equal, leads to an increase in profits. Increasing production volumes that are in demand can be achieved through capital investments, which requires the use of profits to purchase more productive equipment, develop new technologies, and expand production. This path is now difficult or almost impossible for OJSC KOKS due to inflation, rising prices and the unavailability of long-term credit. Since profit from sales of products occupies the largest share in the structure of balance sheet profit, an analysis of the factors that determine it is important for identifying growth reserves for the entire balance sheet profit. Under stable economic conditions, the main way to increase profits from product sales is to reduce costs. This is especially important for enterprises in the manufacturing industries, which partly includes the OAO KOKS plant, where the share of raw materials in production costs is significantly higher than at similar enterprises in developed countries, and the weight of waste is significant. But it should be noted that OJSC KOKS is not only a processing enterprise, but also a mining enterprise, and in mining industries, it is quite difficult to achieve an increase in profit as a result of reducing the cost of mining due to natural causes. This can mainly be achieved by increasing production volumes. The situation with production volumes has recently been critical at Russian enterprises, which, as we know, negatively affects profits from sales of products, but despite this, enterprises receive fairly high profits, not only at the same level as in previous years, but also increasing them. As production costs increase and production volumes decrease, profits increase due to constantly rising prices. An increase in price in itself is not a negative factor. It is completely justified if it is associated with an increase in demand for products, improvement of technical and economic parameters and consumer properties of manufactured products. It follows from this that OJSC KOKS should build its policy on improving the quality of its products so that it has no equal in the competitive market, and then this will lead to a significant increase in revenue figures. Along with improving quality. It is necessary to explore sales markets and find the best conditions for yourself, precisely in terms of getting the desired revenue, and not at least something to cover losses. And of course, one of the methods is to sell your products in the optimal time frame. This method is not unimportant for the enterprise, since the faster the enterprise sells its products, the faster it will receive money, put it into production and thereby receive several times the revenue, which it will use at its own discretion, this is on the one hand. On the other hand, the rapid sale of products will attract buyers; they will see that the product does not sit stale, which means it has good qualities, so it is worth taking, which will also lead to an increase in revenue and in the future to the expansion of production. In addition to methods of increasing the volume of production, increasing prices for promoting products to unfilled markets, the managers of OJSC KOKS need to pay attention to the problem of reducing the costs of production and sales of these products, reducing production costs. Thus, labor compensation plays a significant role in the structure of production costs of OJSC KOKS. Therefore, the urgent task is to reduce the labor intensity of manufactured products, increase labor productivity, and reduce the number of administrative and service personnel. Reducing the labor intensity of products and increasing labor productivity can be achieved in various ways. For the enterprise in question, the most effective will be the development and application of progressive, high-performance technologies. However, measures to improve the equipment and technology used will not give the proper return without improving the organization of production and labor. In the traditional view, the most important ways to reduce costs is to save all types of resources consumed in production: labor and material. Material resources occupy up to 3/5 in the structure of production costs of KOKS OJSC products. Hence the importance of saving these resources and their rational use is clear. The use of resource-saving technological processes comes to the fore here. It is also important to increase the demands and widespread use of incoming quality control of various materials and equipment received from suppliers. Profit at OJSC KOKS will increase as a result of an increase in product production, an increase in the share of products with higher profitability, a decrease in production costs, an increase in wholesale prices, and an increase in the quality of products. The range of products produced has a direct impact on profits. When the assortment structure changes in the direction of increasing the share of products with higher profitability, an additional increase in profit is ensured. Among the factors influencing profit growth, the leading role belongs to the reduction in product costs. The choice of ways to reduce current production costs is based on an analysis of the cost structure. For material industries, the most typical way is to save material resources; for labor-intensive industries, it is to improve the use of fixed capital; for energy-intensive industries, it is to save fuel and electricity. When producing products of higher quality, operating costs most often increase. However, as a result of selling these products at higher prices, profits also increase. Drawing a conclusion, it should be said that all of the above methods can be applied at OAO KOKS and they will bear fruit. An enterprise following one of the above paths or several at once will ensure an increase in revenue, and therefore a way out of the crisis in which it finds itself. The further development and functioning of the enterprise depends on the reasonable actions of the management of this organization and their desire to bring the enterprise to the proper level with good profitability indicators and annual revenue. CONCLUSION Sales proceeds provide an interesting subject for research. In this work, an attempt was made to reveal the economic content, some aspects of practical application, calculations related to the object under study. Proceeds from sales were also studied as the final result of the enterprise’s activities, that is, the stages of the circulation of the enterprise’s funds were studied. As you can see, revenue depends on many factors, both dependent on the enterprise (the degree of possibility of influence also depends on many factors) and independent. The emphasized importance of revenue suggests that its untimely formation and receipt can lead to adverse consequences for the enterprise, even leading to a financial crisis at the local level. Revenue from the sale of products is an indicator of financial condition that characterizes the economic activity of an enterprise. The successful financial and economic activities of the enterprise will depend on how accurately the revenue is planned. The calculation of planned revenue must be economically justified, which will allow for a timely and complete increase in own working capital, appropriate payments to workers and employees, as well as timely settlements with the budget, banks and suppliers. Changes in the volume of sales revenue have a great impact on the financial results of operations and on the financial stability of the enterprise. Based on the analysis of OJSC KOKS, we can conclude that this enterprise needs to carry out modernization and use various methods to increase revenue. Since this figure is quite low for this organization and, moreover, it has been falling for several years. This is necessary because sales revenue is the main component for OJSC KOKS, which forms the organization’s profit. Revenue is not yet income, but a source of reimbursement of funds spent on the production of products and the formation of cash funds and financial reserves of the enterprise. An increase in revenue at an appropriate level of costs leads to an increase in profits, which further creates a financial basis for self-financing of expanded reproduction and solving problems of social and material incentives for workers. LIST OF SOURCES USED 1.Civil Code of the Russian Federation (parts one and two): official. text // Collection legislation of the Russian Federation. - 2011. - No. 32. - St. 410. .Arkhipov A.I. Economic dictionary: Dictionary - M.: Prospekt, 2010.- 624 p. 3.Bakanov M.I., Sheremet A.D. Theory of economic analysis: textbook. - M.: Finance and Statistics, 2011 - 228 p. .Blank I.A. Financial management: training course. - K.: Nika-Center, 2011. - 154 p. 5.Bykadorov V.L., Alekseev P.D. Financial and economic condition of the enterprise. Practical guide. - M.: PRIOR Publishing House, 2010. -256 p. .Gavrilova A.N., Popov A.A. Finance of organizations (enterprises): Electronic textbook: Textbook - M.: KNORUS, 2009. 7.Dolbina, A.S. Distribution costs of a trading enterprise in a market economy: Textbook - M.: Prospect: 2010.-247p. 8.Zbinyakova E.A., Ivleva N.V. Financial management: Workshop - Orel: Publishing house ORAGS, 2011.- 172 p. .Kovalev V.V., Volkova O.N. Analysis of the economic activity of the enterprise. Textbook - M.: Prospekt, 2011. 10.Lifits I.M. Formation and assessment of the competitiveness of goods and services. Textbook - M.: YURAYT, 2011. - 548 p. 11.Lugovoi A.K. Accounting for costs of production and sales of products (works, services). Educational and methodological manual - M.: KNORUS. 2011. - 211 p. .Makarieva I.V. Analysis of the financial and economic activities of an organization for accountants and managers. - M.: Taxes, 2010. 13.Markarian E.A. Gerasimenko G.P., Markaryan S.E. Economic analysis of economic activity: Electronic textbook: Textbook - M.: KNORUS, 2009. 14.Ivashkevich V.B. Management accounting: textbook for universities. - M.: Economist, 2011. - 618 p. 15.Semenov V.M. Enterprise Economics: [Text]: Textbook for universities / ed. acad. V.M. Semenova/ - St. Petersburg: Peter, 2010. - 416 p. 16.Fridman P.I. Control of costs and financial results of product quality analysis. Educational and methodological manual - M.: Economics, 2011. - 157 p. .Anthony R.D. Accounting: situations and examples. Textbook - M.: Finance and Statistics, 2010. - 541 p. .Lipatov I.V. Profit forecasting // Finance. - 2012 - No. 2 - P. 12-14. .Sheremet A.D. Financial results of economic activity of an economic entity // Audit and financial analysis. - 2011 - No. 4 - P. 45-69. 20.Official website of the enterprise OJSC KOKS [Electronic resource] .Federal State Statistics Service [Electronic resource] 22.Journal "Economic Analysis: Theory and Practice" [Electronic resource] .Journal "Economics and Entrepreneurship" [Electronic resource] APPENDIX A Balance sheet of the enterprise OJSC KOKS for 2009-2011 ACTIV200920102011I. NON-CURRENT ASSETSthousands. rub.%thousand rub.%thousand rub.% Intangible assets 760.001200.001230.00 including: patents 760.001200.001110.00 other 00.0000.00120.00 Research and development results 210.003880.0000.00 Fixed assets 457593412.39424099413 ,30420025611.36including: land plots101380.0380850 ,0380850.02 buildings, machinery and equipment 34104789, 24339253210, 6432860128.89 construction in progress 10991152.988239512.589000902.43 advances issued (construction of facilities) 562030.15164260.0560690.0 2 Income from investments in intangible assets 00.0000.0000.00 Financial investments 2360518863.931966901561.672003303354.18c including: investments in subsidiaries 2089287756.591681036752.711566323642.36 investments in other organizations 11417313.0911417313.5811482023.11 loans provided to organizations for a period of more than 12 months 15185904.1117164275.3 832211058.71 other financial investments 00.0000.0000.00 Deferred tax assets 11180.009890.00777480, 21 Other non-current assets 16660884.5115738884.941612550.44 TOTAL for section I: 2984834580.842548539479.912447241566.19 II CURRENT ASSETS Inventories 7249331.969349132.9388 83602.40 including: raw materials, materials and other similar values 6807721.847558212.377930412.14 costs in work in progress (distribution costs )00.0000.0000.00finished products and goods for resale396140.111297190.41460910.12goods shipped00.0000.00417750.11deferred expenses45470.01493730.1574530.02Value added tax on acquired assets284 0970.772226560.702030330.55 Accounts receivable 35892709.72418080513, 111090149129.48 including: buyers and customers 21478045.8221461026.7330003258.11 advances issued (construction of facilities) 2148010.583759261, 181882640.51 other debtors 12267813.3216587775, 20771290220.86 Financial investments (excluding cash equivalents) 24427816.628441272.654915071.33 including :loans provided to organizations for a period of less than 12 months23790096.448441272.654915071.33deposits637720.1700.0000.00other financial investments00.0000.0000.00Cash (and cash equivalents)137490.041078810.345107 0.01 including: cash desk 1410.001080, 001170.00 settlement accounts 108400.03986520.3122200.01 currency accounts 14030.0081690.0315420.00 other cash accounts 13650.009520.0012280.00 Other current assets 196660.051164950.37127 400.03 TOTAL for section II 707449619.16640687720.091250223833.81 LIABILITIES III CAPITAL AND RESERVES Authorized capital 330050.09330050.10330050 .09 Own shares purchased from shareholders 00.00 (-5928063) 0.0000.00 Revaluation of non-current assets 1411640.381406360.441393860.38 Additional capital (without revaluation) 13604283.6813604284.2713604283.68 Reserve capital 50020.0150020.0250020.01 including: reserves, formed in accordance with the law 50020.0150020.0250020.01 Retained earnings (uncovered profit) 1314834135.611273878639.941171156031.67 TOTAL for section III 1468794039.78834979426.181324938135, 83IV LONG-TERM LIABILITIES Borrowed funds 1063931228.81952384529.861723451846.61 including: loans to be repaid within 12 months 551296214.93452384514.189658832.61 loans to be repaid within 12 months 512635013.88500000015.681626863544.00 Deferred tax liabilities 2873350.784689111.47694480.1 9Estimated liabilities00.0000.0000.00Other liabilities00.0000.0000.00TOTAL for section IV1092664729.59999275631.331730396646 ,80V SHORT-TERM LIABILITIES Borrowed funds 837581522.681043032532.70410900111.11 including: loans to be repaid within 12 months 664838018.01942868629.5611335823.07 loans to be repaid within 12 months 664868018.01942868629.5629754198.05 Accounts payable 28839537.8130270199.4922576066.11 including :suppliers and contractors8848542,406932132,1713490063.65debt to the organization’s personnel365020,10732270,23436830.12debt to extra-budgetary funds100670.03185680.06202950.05debt for taxes and fees1 034120,282554580,80685500,19 debt to participants (founders) for payment of income 16162014,3818778045,896592281, 78advances received1623470,44712350,22963500,26other creditors705700,19375140,12204910,06Deferred income770,005050,004820,00Estimated liabilities441640,12478270,15541250,15Pro whose liabilities42750.01440450.14920.00TOTAL for section V1130825430.631354972142.49643130617.39BALANCE 36922841100.0031892271100.0036974653100 .00 Appendix B Profit and loss report of OJSC KOKS for 2009-2011 Name 2009 2010 2011 Revenue - 31,077 53,126,877,251 Cost of sales - 23,213,77,417,898,105 Gross profit (loss) - 7,863,7578,979,146 Selling expenses - 4,250,4533,184,538 Administrative expenses-768 980768 125 Profit (loss) from sales 3 252 4362 844 3245 026 483 Revenue from participation in other organizations 546 2511 681 87642 797 Interest receivable - 191 664 267 515 Interest payable - 1 607 8681 971 366 Other income - 21 918 44813 214 441 Other expenses 785 65526 538 25615 017 414 Profit (loss) before tax2 466 8521 509 8121 562 456 Current income tax91 752-401 479 including permanent tax liabilities-235 667270 079Change in deferred tax liabilities-10 514181 702Change in deferred tax assets-76 809128Other-406 7207 217Net profit (loss)2 161 6811 036 797971 930
First of all, it should be noted that revenue represents money received by the enterprise as a result of the sale of products, goods or services. A decrease in revenue is characterized by a decrease in cash flow, received by the enterprise from the sale of products (goods, services), which can be caused by a number of objective or subjective reasons.
Revenue is very important for an economic entity, as it is one of the main sources of financing activities. In this regard, the management of the organization must regularly monitor any changes in this indicator and respond to them in a timely manner.
REFERENCE. There are situations when the management of a company deliberately reduces sales revenue (for example, in order to conquer new markets, the price of a particular product is reduced, which subsequently affects the amount of revenue).
What factors influence this indicator?
It should be noted that the amount of revenue is influenced by many different factors, which can be divided into two large groups:
Reasons why the fall occurs
The following are the most common reasons for a decrease in revenue:
- Product obsolescence– sooner or later the market becomes saturated with a certain type of product, which causes a decrease in sales volumes and revenue.
IMPORTANT. An entrepreneur should promptly update the range of products produced, giving it new quality characteristics or creating another product.
- Seasonal drop in demand– there are specific types of goods, the demand for which fluctuates depending on the time of year. For example, swimsuits will be sold much more actively in the summer. However, in winter the demand for them drops sharply.
- Increase in cost– for example, an increase in the price of raw materials and materials can significantly increase the cost of manufactured products. At the same time, it is not always possible for a commodity producer to raise the price, as this can reduce the competitiveness of the product. As a result, there is a decrease in sales revenue.
- Weak advertising and marketing policy– today active advertising is one of the main factors contributing to an increase in sales.
- Decrease in production volumes– for example, during a crisis, many enterprises significantly reduce production volumes, which ultimately affects the amount of revenue, etc.
For clarity, let’s look at the reasons for the decline in revenue using the example of a construction company and a store. In construction, revenue may fall for the following reasons:
If revenue has fallen in a store, this may be due to the following reasons:
- incompetence, as well as rude treatment of sellers;
- weak promotional activities;
- lack of “tasty” offers, various discounts, promotions and bonuses;
- narrow range of products;
- unreasonably inflated prices (in this case we are talking about stores designed for a wide range of consumers), etc.
Step-by-step instructions: what to do if your income level has decreased?
So, if revenue falls, the following steps should be taken:
- First, it is necessary to analyze the current state of revenue at the enterprise, as well as identify the degree of deviation of its actual indicators from the planned ones.
- It is necessary to understand the main reasons that caused the decrease in revenue. This stage is very important, since timely identified causes of failures in the enterprise’s activities will allow the necessary measures to be quickly taken to eliminate them.
- Having identified the main reasons for the decline in revenue, you should begin to select specific ways to increase it.
The following ways to increase sales income can be identified:
- reduction of production costs;
- increase in production volumes;
- conducting an effective advertising policy;
- entering new markets;
- expansion of the range of goods, etc.
- Implementation of specific measures to increase revenue. This stage involves:
- setting specific goals;
- control over the implementation of assigned tasks;
- analysis of the results obtained.
What not to do?
It should be noted that there are a number of prohibited techniques that are not recommended to be used when revenue is falling. Otherwise, the situation can only get worse. So, let's look at them in more detail:
To summarize, systematic decline in revenue is a serious cause for concern. At the same time, you should not make hasty decisions. First, you need to carefully analyze and weigh everything, and only then take specific actions.
Any modern educated financier understands that the value of money paid in the future is not equal to the value of the same amount of money spent now. By now we will mean the next 12 months, based on the classical concepts of short- and long-term periods. For those who left the institute long ago and do not have the opportunity to attend modern trainings and courses, we would like to remind you that if a company managed to delay the outflow of cash resources into the future, then it received two big pluses in its treasury of values:
- She will pay less in the future due to the factor of money depreciation over time (the effect of inflation);
- In the present, there are free funds that can be used for purposes that are much more useful for the development of the company, increasing its internal value, than paying taxes.
Well, in our country, in addition to the temporary factor of the cost of money, one should also take into account the fact that we must try to “create” such reporting, the indicators of which will not attract undue attention from tax inspectors, because not a single manager or accountant will be happy to see representatives of the Federal Tax Service at home visiting for a surprise inspection or being called in for questioning regarding fluctuations in the company’s financial performance. So our accountants work day and night during reporting periods so that the figures not only do not contradict the tax code, but also are not interesting to inspectors. Moreover, it is dangerous to show both a sharp profit and a loss here.
When deciding whether to show a sharp increase in profits in post-crisis periods, we can advise you to pay attention to how public companies act in this regard in their reports available on the company’s websites: if the organizations’ field of activity coincides with yours, and they are mostly boldly show the growth of financial indicators, then your unprofitable statements or statements that differ little from the previous crisis year will look somewhat strange. Conduct a survey of the work of your colleagues and acquaintances from other companies, what they do and why, well, if you have in your notebook the phone number of a tax specialist you know, then you are very lucky, you can consult with him in an informal conversation about what you should do.
So, there are two possible situations: you start from the economic efficiency indicator when deciding on the level of the company’s profit indicator and answering the question “when to pay income tax: now or in a year, two, three..?”, give a bold and decisive answer “ the later the better." Or, afraid to stand out from the crowd, follow trends.
Let's consider the first scenario, when you need to postpone profit growth in time, because, in our opinion, it requires more careful study. We in no way urge you, dear readers, to evade paying taxes to the treasury of our state, since we understand that the quality of the social side of our lives should depend on the amount of tax revenues to the budget. But let’s try to tell you how to combine business with pleasure without risking greatly upsetting the tax inspector.
We list the areas of accounting and tax accounting in which you can look for options for temporarily reducing profits and deferring the payment of income taxes for future periods:
- Creation of reserves
- Depreciation
- Conditions of contractual relations with clients and customers of the company
Let's take a closer look at each of the areas.
Reservation
Russian legislation provides almost unlimited freedom for companies to reserve their future expenses. We must take advantage of this opportunity while it exists, because there is a risk of tightening Russian accounting standards in this area due to the approaching of our legislation to international ones. The latter outlines clear criteria that the reserving process must meet, so manipulating profits by creating reserves and canceling them from year to year will not work if you prepare reports according to IFRS. But while this has not yet happened, a Russian accountant can create reserves and assign them to non-operating (or other - depending on the type) expenses of the current period. There are some time restrictions on the use of these reserves, so you must take this fact into account if you do not want to end up in front of a tax inspector in the future to explain the detailed reasons why you created the reserve and did not use it. As an option, it is possible to change the accounting policy from year to year, revise the size of the reserve, partially use it, but in any case, do not put all your eggs in one basket, using only this technique to reduce taxable profit, so as not to make it very attractive for consideration tax service.
Below we present several examples of possible reserves, as well as documentation that would be good to have in the company to confirm the validity of their creation.
|
Reserve |
Documentation |
|
Provision for repairs of fixed assets |
Plan for current and major repairs for next year |
|
Provision for doubtful accounts receivable |
The results of the inventory of receivables in the form of a statement of debtors with an assessment by management and the legal service on the likelihood of repayment, dates of debt occurrence. Letters of request to dubious debtors, confirming that the company made an attempt to force its counterparties to pay. Agreements with a payment date that is earlier than the reporting date. |
|
Reserves for warranty repairs |
Agreements for the sale of your products, which include your company's obligation to provide warranty after-sales repairs and maintenance. |
|
Reserve for payment of future vacations |
A report from the HR department on the number of unused vacation days as of the reporting date and, based on it, the calculation of the reserve. |
|
Provision for possible losses |
Assessment of the risks of possible losses (may affect different areas, but from practice it is clear that, basically, these reserves are created by credit institutions) |
|
All reserves |
Accounting policy statement on how each provision is calculated |
Let us not forget to mention that enterprises that apply special tax regimes (for example, simplified companies) do not have the right to create reserves, and also that the reserve limit is enshrined in the Tax Code and is 10% of the company’s revenue for the tax period.
Depreciation
A company can use accelerated depreciation (so-called escalation rates) for fixed assets if it can prove that these fixed assets are used either very intensively or in a hostile environment. As a result, depreciation costs will be shifted in the time horizon closer to the present time, which meets the goal set above. We will not dwell on this point in detail, because... the procedure and technical side of applying this relaxation is quite clearly described by the tax code and numerous comments.
Terms of contracts
If the company would not like to recognize revenue in a given tax period, the moment of its recognition can be postponed to the future by, for example, concluding agreements with Clients under which the results of work will be accepted in the next year after signing the acceptance certificates. In other words, do not sign the deed until December 31st. It is better to stipulate the corresponding provision on the method of revenue recognition (the moment of signing the act coincides with the moment of transfer of ownership) not only in contracts, but in the company’s accounting policies.
For those organizations that are engaged in long-term work, it is possible to recognize revenue not according to the percentage of completion, but according to the share of expenses incurred. This will give the company some freedom to manipulate the amount of revenue recognized from period to period. The amount of expenses for the current period is a field for reflection by the accountant and the head of the company.
Well, and, of course, there is another area in which company management can show their own unique creative abilities to minimize the tax burden - this is the area of expenses that reduce taxable income. This will not release additional free funds here and now, as discussed above, but it will undoubtedly be able to increase the value of the company. Let's consider several interesting, in our opinion, options.
The company can reduce taxable profit for expenses associated with personnel training, if such training is economically justified and expedient, that is, employees will be able to apply the knowledge acquired during the training process in their professional activities. Do you need an assistant payroll accountant, but an administrative assistant with a higher education has been asking for a long time to be transferred to the financial service of the company? So, instead of paying an agency to find you a new specialist, why not transfer the current one and pay for accounting courses for him. As a result, you receive three bonus points for the company in the form of:
A – a motivated, qualified and satisfied employee,
B - costs under the item “personnel training” rather than “consulting”, which attracts less attention from the tax inspector and is easier to explain,
B – a bold reduction in the tax base for these expenses.
A company can outsource any internal function - for example, an accounting service, paying not just wages, but services for maintaining accounting and tax records. At the same time, control over operations does not extend beyond the company, but allows you to somewhat “distribute” profits across several organizations, helping to achieve the goal of reducing the strength of the negative reaction of the tax service to profit growth. Here we can also talk about managing the flow of money over time, paying for the services of this service organization at a “convenient” time.
Another interesting option for justified costs during a crisis can be considered payment for the services of crisis management consultants. Do you need to optimize your internal business processes, and paying for overtime of internal staff is associated with complex personnel administration, or are there simply no such specialists on staff? Then it would be a sin not to use the services of an external company, counting this type of expense against taxable profit. By the way, let’s not forget to mention that the tax inspectorate will not allow the remuneration of members of your board of directors, if you have one, for solving anti-crisis problems to be taken into account when calculating taxes - such a paradox!
With this, we allow ourselves to finish our thoughts on the topic of finding options for reducing taxable profit in the reporting period, although, in our opinion, it is almost limitless. And the more experienced, qualified and, most importantly, creative personnel work in its financial structures, the more opportunities a company has in this area. Let’s also hope that the new head of our country’s federal tax service will listen to the government’s recommendations and be able to redirect the energy of his valiant inspectors to building more constructive relationships with business. Then company managers and accountants will finally be able to get rid of the need to artificially adjust reporting indicators for fear of receiving an additional request or audit from the tax service, and Russian business will move closer to emerging from the shadows.
Issues discussed in the material:
- What is the danger of a decrease in revenue for a company?
- What are the reasons for the decline in revenue?
- How to prevent a decrease in revenue?
It is unlikely that at least one, even quite successful enterprise, has ever encountered such a phenomenon as a decrease in revenue. And it is not always caused by unprofessional actions of the company’s management. From the article you will learn about the factors that reduce revenue, the dangers of such a situation and how to prevent it.
The danger of a decrease in revenue for an enterprise
Revenue refers to money received through the sale of a company's goods, work or services. A decrease in income is expressed in a decrease in the flow of these funds as a result of both objective and subjective reasons. The importance of profit for an enterprise cannot be overestimated, since it is precisely it that is used to finance its activities. In other words, income received from the sale of goods, works or services is the main material component of the organization’s well-being. The lack of own funds, constantly replenished and in circulation, will not allow the company to exist on the market for a long time.
At the same time, we note that in some cases, the organization’s management deliberately reduces revenue from the sale of goods, work or services (for example, when conquering new sales niches, the company reduces the cost of a particular product or service).
Reasons for the decline in revenue
There can be many reasons causing a decrease in revenue. Let's look at the main ones.
- Seasonal drop in demand.
A number of consumer goods have seasonal demand. Few people need skis in summer or bicycles in winter. However, you should not be upset about this in advance. Organizations selling seasonal products have adapted to this phenomenon by calculating all the necessary actions and steps. Therefore, the financial results of the year of long-running enterprises do not depend on this factor of revenue decline.
If you are just going to explore a new market for your products, then be sure to study the specifics of sales in terms of the seasonality of the goods or services you offer. For example, the south of Europe is characterized by a decrease in revenue in the summer. Spain is widely known for its siestas, when shops are closed during the day and shoppers visit them less frequently. It is quite natural that this state of affairs affects their income. That is, too hot weather may well cause a similar shopping siesta and last for a couple of months.
- Loss of popularity of the product.
The phrase about the fact that nothing lasts forever under the moon is probably familiar to everyone. Another, and very banal, factor causing a decrease in sales revenue may be the loss of interest by customers in the products or services offered. This situation can be caused by various reasons, starting from the fact that your product is outdated, and ending with the activation of competitors offering similar products, but at a lower price. One should not discount fashion, which is characterized by variability. The result of all this is a decrease in profits from the sale of their goods or services.
- Customers leaving for competitors.
Competition is good for consumers, but it is unlikely to please business representatives, especially small ones. Revenue can decrease at any time, and sometimes you are completely unable to influence the situation. The appearance on the market of a strong company offering similar products and services will almost immediately lead to a drop in income. The same threatens price dumping from competitors. And there is no insurance against such cases. If you also start reducing the price, you can lose even more revenue, and if you get involved in a fight with a more successful company, you can even find yourself without any income from sales.
- Fall in demand during a crisis.
Perhaps one of the most terrible situations that an organization can face is a crisis or a decrease in production. In any case, the crisis means a decrease in the purchasing power of the population. This means a drop in the company's revenue. Moreover, people often refuse to spend money not because they lack it, but out of a desire to save money and save for the future, because it is unknown what lies ahead and how long they will have to live in such conditions. Crises hit expensive goods (apartments, cars), as well as non-essential products, the hardest. As a result, we again end up with a decrease in the organization's profits.
- Excess of loans issued to the population.
A number of experts agree that the cause of crises (and therefore a decrease in company income) lies in the numerous consumer loans issued to everyone. On the one hand, the available money and the opportunity to purchase expensive things with deferred or installment payments increase the enterprise’s income, which had begun to decline.
However, sooner or later the credit funds run out, the client’s purchasing power again ends up at zero and entails a decrease in the company’s revenue. At the same time, the family spends most of the budget on paying off debts. But no one canceled the payment of utility bills, gasoline, communications, and the purchase of essential products. Thus, there is no more money left to purchase something for oneself and for the soul, and organizations note a decrease in their profits.
- Unbalanced assortment.
A balanced range of products offered by the organization will help to avoid a decrease in revenue. That is, the goods sold must generate income and participate in turnover. In the second case, you may encounter a sufficient number of competitors, however, the demand for such products continues to remain high. For example, lately thermal printing has become increasingly popular among the population, in which designs are applied to various products - from T-shirts with personalized inscriptions to mugs with portraits of newlyweds.
Due to high competition in this area, the cost of thermal printing equipment itself is not so high. But there are a lot of people who dream of a personalized mug or a one-of-a-kind T-shirt. Thus, the demand for this equipment will remain high for a long time. And organizations that have found their niche in this area must adhere to a fairly flexible policy. That is, income from the sale of equipment should account for about half of all funds received by the company. And in this case there is no need to talk about a decrease in revenue.
- Incompetence and passivity of enterprise employees.
There are no difficulties in understanding this factor in the reduction in revenue. The company's income is falling due to the fault of the staff. In this case, it is worth carefully analyzing the work of employees, especially sales managers. We can talk about their incompetence or passivity in the following situations: p>
1.They advise clients on those products that are easiest to sell. In this case, the staff lacks incentive to perform their duties better. That is, they are not initially focused on selling products that can bring the greatest profit to the company. On the contrary, managers offer customers what they themselves prefer, because in this case it is much easier to conclude a deal.
2. The sales specialist’s haste is caused precisely by his desire to avoid a decrease in profits. However, in this case, without offering a full range of products, there is a high probability of depriving customers of the right to choose. Hurry is characterized by inattention, which means that it may well happen that the most popular product will not be put on the shelves on time. As a result, you can easily end up with a decrease in sales volumes.
What to do to prevent a decrease in revenue
Increased revenue and growth of financial results can be achieved by increasing production or expanding the range of goods or services offered, or by producing products with new consumer properties.
Despite the fact that revenue levels depend on industry factors, each enterprise has its own reasons for its growth.
The main points influencing the increase in sales and, accordingly, the growth of sales income are the following:
1. Fulfillment of obligations.
The company's compliance with strict and strict fulfillment of contractual obligations guarantees an increase in profits.
Set specific tasks for the employees of the economic department:
- monitor payments for sold products, as well as the execution of work in accordance with the calendar or production plan;
- analyze the receipt of money for goods shipped and services provided in each structural unit and in the enterprise as a whole;
- exercise control over the execution of all existing contracts.
Contractors need to ensure timely delivery of goods and high-quality performance of work.
It is also impossible to account for revenue on time without monitoring receivables and payables. The company’s task is not only to collect payments from customers and consumers, but also to fulfill its own obligations to partners.
2. Expansion of the client base.
Revenue growth can be achieved by attracting new contractors. That is, it is necessary to look for new customers to conclude contracts for the supply of goods (performance of work or provision of services).
You can attract clients by creating an internal call center with professional managers who know everything about increasing sales.
Today, a very relevant way to communicate about yourself and your product is to create a company website. In this case, it is better to use the services of professionals who can resolve issues with registration and optimization of the resource.
By attracting new clients and counterparties, you can avoid a decrease in revenue; on the contrary, you can plan and increase the company’s profit.
3. Ensuring the highest quality products.
This question has complex meaning. It is important both for clients and for the organization itself. If you pay sufficient attention to the quality of goods sold, work performed or services provided, you will increase the volume of product sold, and therefore profits, while simultaneously raising the prestige of the company.
If we talk about long-term prospects, then this criterion is given special attention. At the same time, we note that compared to changes in cost, improving quality is a long process that requires significant financial (and other) investments. In some cases, there may be a need to re-equip production and develop new technologies.
Every company seeking to prevent a decrease in profits needs to analyze the quality and competitiveness of the goods (works, services) offered, and also strive to improve these indicators. This result can be achieved by improving the organization of production and labor, deepening specialization, increasing the technical level and qualifications of employees.
4. Optimization of prices and pricing.
The cost of goods or services is formed in accordance with the economic situation on the market, cost, desired profit, established taxes, qualities and consumer properties of the products offered. To calculate tariffs, costing is used for each type of product, and prices are influenced by economically justified costs, including taxes and fees payable.
Let us note the following points:
- The price is formed in accordance with the following factors - competitiveness, level of consumer demand, costs of producing a product or providing a service, and economic effect.
- In any case, the cost must be justified. The costing of each type of product or work is influenced by material and labor costs, overhead costs and taxes provided by law.
- If a certain level of company profitability is not included in the product price, then there is a high probability of a decrease in revenue at each subsequent stage of capital turnover. This situation will inevitably entail a decrease in production volumes and a deterioration in the financial condition of the enterprise.
Due to inflation, costs are constantly rising. This is due to an increase in the cost of utilities, prices for necessary materials, maintenance of enterprise property, etc. Accordingly, the beginning of each year is marked by an increase in the cost of goods sold and services offered by organizations, taking into account the percentage of inflation. Recent data indicates an average price increase of approximately 10–15%.
Is revenue falling?
Let's talk about unpleasant things. Sooner or later, a situation happens to any store owner when reporting for a period inexorably says: compared to the previous period, revenue has fallen... And here there are different reactions.
Someone, without giving himself the trouble to think about why, waves his hand: well, it happens that the month or quarter turned out to be unsuccessful. The next one will be better.
And this is the surest path to trouble. Because a drop in revenue in a clothing store is always a wake-up call.
Someone panics, vomits and rushes, fires staff, abruptly and thoughtlessly, rashly changes the assortment...
And this is also not the best thing that can be done. What is happening is not ruin, not bankruptcy. Yes, this is an alarming signal and cannot be ignored. But in order not to make a mistake, you need to react thoughtfully. Not at random.
What to do? How to increase revenue?
The first thing you need to do is analyze the reasons for the decline in revenue. Consider the following:
- Are the reasons seasonal? What did the revenue dynamics look like for the same reporting period last year?
- What happened to sales? If the same number of units of goods were sold as in the previous period, and revenue has fallen, look for reasons in your pricing policy
- If sales have fallen, what about your product range? Is it appropriate for the season?
- What has changed in the store compared to the previous reporting period and even earlier? Some negative changes do not have an effect immediately, so look for the reasons one or two, or even three periods ago.
- Did it happen that you stopped doing something that you were doing before? For example, advertise outdoors or conduct active sales within the database? It is precisely such actions that have a delayed negative effect. And replacing the seller with a less professional one is immediate.
- If you yourself haven’t changed anything or stopped doing anything, it’s time to pay attention to the actions of your competitors. Perhaps they did something very successful, drawing away customers from you?
- Do you trust your employees? Are internal reporting in order? Is everything logical in it or does something require close attention? There were cases when revenue did not fall at all, just part of it changed its destination, missing the owner.
First, stop digging...
What to do once you understand the reasons for the decline in revenue? There is such a good phrase: “When you suddenly find yourself in a hole, the first thing you do is stop digging.” So, if there is a reason for the decline in revenue, the matter will not improve on its own. Whatever happens - the cause must be eliminated. Even if this is your new sign, which cost you a lot and you really liked. Even if the new seller, who does not communicate competently with clients, is a friend’s daughter and generally a “good girl.”
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