Profitability of the Enterprise and Ways to Increase It

Abstract

The object of research of the article is the profit of enterprise and ways to increase it. The scholars’ opinions on the definition of «enterprise profit» were analyzed and the main approaches to its understanding are formed. According to the specified approaches, profit can be figured as follows: a monetary expression of part of the value of an additional product; net income of the entrepreneur from the invested capital; the difference between total income and total expenses; positive financial result of enterprise. According to the study, the definition of the concept of «profit» is formed and the essence of its meaning together with main functions is disclosed. The article discusses the theoretical aspects of increasing the profitability of enterprise, examines the factors of influence. Among the main factors influencing profits can be identified two groups: factors that do not depend on the activities of the enterprise (external); factors within the competence of enterprises (internal). The enterprise’s strategies related to profit are analyzed. The profitability of enterprise is an indicator that directly determines the final result of the activity of any enterprise. Increasing the profitability is one of the main goals of the management of any enterprise. There are many methods of increasing profitability, each enterprise chooses the most advantageous and convenient for itself, some of the methods are discussed in this article. The methodological and informational basis for the study of profitability of enterprise and ways to increase it are special and methodical literature by foreign and domestic authors, statistics of the Ministry of Statistics of Ukraine, periodic and reference literature; accounting, statistical, and operational reporting.

Keywords

• profit
• profitability
• efficiency
• enterprise
• self-cost
• analysis of financial indicators
• ways to increase