To ensure the survival of the company in modern economic conditions, management personnel must, first of all, have a real idea of the financial condition of both their own enterprise and competing firms. Of key importance in this is the timely and qualitative analysis of economic activity. Any enterprise exists for profit. Accordingly, income acts as a key object of analysis. Meanwhile, the amount of profit cannot fully reflect the efficiency of the use of resources by the enterprise. For its assessment, an indicator such as profitability of turnover is used (the formula will be described later in the article). It is of great importance in the analysis and planning of the economic activity of any company. Consider this indicator in detail. 
general information
Profit and profitability are indicators that clearly reflect the performance of the company, the rationality of its use of its own resources, as well as the profitability of areas of investment, entrepreneurial, industrial and other activities. The organization sells its products to consumers and receives revenue. However, this does not mean that the company is profitable. To determine the real financial result, you need to compare the proceeds with the costs of production and sales. If it exceeds the cost of products, the company will be profitable. In case of equality of indicators, all funds received will go to reimburse costs. If the costs are more than revenue, then the company is considered unprofitable. This puts the company in a rather difficult situation and can lead to bankruptcy. To get maximum profit, you should analyze its indicators, factors affecting its value, as well as profitability of turnover. The latter shows the efficiency of current expenses and is in some way a synthesis of different quantitative and qualitative characteristics. 
Profitability and profit
If the company, after deducting all expenses from the proceeds, has funds, then it is considered profitable. Profit - the bulk of the cash savings created by organizations of any type of property. Acting as an economic category, it reflects the result of the company's business. Profit shows the efficiency of production capacities, the quality and volume of products, the level of productivity and cost. She acts as one of the key values used in the analysis of the economic activity of the company. At the expense of profit, measures are financed for socio-economic and scientific-technical development, the salary fund of employees is increasing. Moreover, it is not only a source that provides the internal needs of the enterprise. Profit is of great importance when creating budgetary, charitable and extrabudgetary resources. The profitability of an economic entity is characterized by relative and absolute indicators. The latter include the amount of profit. A relative parameter is the profitability of turnover. 
Specificity of indicators
It should be said that by the absolute value of profit, it is not always possible to get a real idea of the company's profitability. This is due to the fact that the size total income affects both the quality of work and the scale of the activity.In this regard, to fully characterize the functioning of the enterprise, profitability of turnover is used. These indicators should be analyzed relative to other periods. Absolute values alone provide little information. The most reliable way to judge the activities of a company is by the dynamics of changes in parameters. In market conditions, the profitability of sales turnover is of particular importance. It to a certain extent characterizes the degree of profitability or loss-making of production. 
Analysis
As indicated above, despite the fact that profit acts as one of key performance indicators industrial and economic activities, it does not give a reliable idea of the performance of the company. This is due to the fact that it does not take into account the amount of resources and the conditions under which it was obtained. For a realistic assessment of profitability, methods of complex analysis by technical and economic factors are used. Profitability of turnover is the most important characteristic of the actual environment for creating enterprise profits. During the analysis, its indicator is used as a tool for pricing and investment policy. 
How to calculate profitability?
This indicator is determined in various ways. It can characterize the effectiveness of the company as a whole, the profitability of specific areas of its work (investment, entrepreneurial or industrial), return on costs. Consider how to calculate profitability. The indicator reflects the relationship between the total revenue of the company and its expenses. The calculations are made as follows:
Rob = Mon p. x 100 / Vwhere:
- In - revenue;
- Mon p. - profit without accrued interest;
- Rob - profitability of turnover.
The greater the profit compared to the company's revenue, the higher the rate. Widely enough, the profitability ratio of turnover is used in a market economy. It is determined both by the enterprise as a whole and by specific types of products.
Financial resources
The analysis also uses such an indicator as return on capital turnover. It reflects the ratio of total revenue to the size of its own finances. Calculations are performed using the following formula:
Chob. k. = B / A, where:
- In - revenue;
- A - assets;
- Chob. to - the number of capital turns.
The larger the size of the total cash receipts of the enterprise, the greater the specified indicator. 
Total value
As a result profitability level generally determined by the formula:
Yo p = Chob. to x Rob.
Thus, the indicator is equal to the product of profit without interest on 100% income divided by assets (according to the previous equations). The value of profitability of turnover more fully reflects the final results of operations. This is due to the fact that its size shows the ratio of efficiency with available or used resources of the enterprise. In this regard, profitability acts as a mandatory element of the comparative analysis of the financial position of the company.
