Return on sales formula for the balance sheet. How to calculate profitability of sales: what is it and how is it displayed

Profitability is an economic indicator that shows the degree of efficiency in the use of any type of resources (material, natural, labor, capital, investment, sales, etc.). In other words, profitability is the profitability of a business, its economic efficiency and benefits.

Accordingly, if the profitability indicators are negative, then it is unprofitable to conduct business and it is necessary to work on indicators of increasing profitability, find out the reasons for low profitability and look for ways to solve them. Profitability, its level is expressed in coefficients, and relative indicators are expressed as a percentage.

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Also, profitability shows the effectiveness of the use of certain funds, when the company not only compensates for all costs, but also makes a profit.

There is such a thing as the profitability threshold - this is an indicator (point) that actually separates periods of unprofitable production and effective work companies (compare it with the break-even point).

To analyze the efficiency of the enterprise, actual profitability indicators are compared with planned ones, with data from past periods and similar economic data from other companies. The ratio of total income to the main flows or assets - these will be the indices (ratios) of profitability.

The main standards for profitability can be divided into the following main groups:

• profitability of sales (profitability of sales);
• return on assets (profitability of non-current assets);
• return on investment;
• return on current assets;
• return on equity;
• product profitability;
• income from the efficient use of production assets;

The total profitability of the company and is determined by these main indicators, depending on the scope of its activities. Assets and their profitability equals the efficiency of using equity or invested funds, how assets make a profit and in what quantity, depending on the resources expended. Return on assets is calculated as the ratio of profit for a certain period to the amount of assets for the same period.

Formula:

Return on assets, R act. \u003d P (profit) / A (size of assets)

According to the same parameters, economists calculate the profitability of using production assets, investment capital, and own fixed capital. For example, the return on equity shows how effective shareholders' investments in the business are.

Profitability of sales and formulas for its calculation

Return on sales (profitability products sold) is an indicator of profitability, expressed in coefficients and displays the income (its share) for each spent monetary unit. Return on sales is calculated as the ratio of net profit to total revenue.

Formula:

Return on sales, R prod. = P (net income) / V (revenue).

Profitability of sales directly depends on the pricing policy of the company, its flexibility according to market conditions in a particular segment. Some firms apply their external and internal strategies, study competitors' markets, product ranges and their lines to obtain high profitability from sales.

There are no clear norms and values ​​​​to indicate the profitability of the sale, since the normative value and their indicators depend on the specifics of the company's activities. Return on sales measures show the overall performance of operations over a specific period.

Basic formulas for calculating profitability of sales

For effective management sales and control of the company's performance, the profitability of sales is calculated according to the following indicators:

• by gross profit;
• operating profit EBIT;
• according to the balance sheet;
• net return on sales;

The profitability of sales by gross profit is an indicator (coefficient) of profitability, which means the share of profit on each earned monetary unit. This indicator is calculated as the ratio of net income (after paying all taxes) to the total Money for the same operating period of the enterprise.

The formula will be:

Operating profitability = Gross income / Trading revenue.

Gross profit organization is still displayed in the data financial statements. Operating profit margin EBIT is the ratio of EBIT to total revenue. EBIT is total income before all taxes and interest.

The formula for calculating this indicator:

Return on sales from operating income EBIT = Total revenue (before taxes) / Total revenue

The EBIT return on sales is also referred to as the operating return on sales. This ratio is intermediate between total sales return and results. net profit companies.

Return on sales by balance sheet- this is a coefficient that is calculated according to financial statements and characterizes the share of profit from sales of the company in the amount of total revenue.

Calculated using the following formula:

Balance sheet profitability = total sales revenue (or loss) / sales revenue.

Net sales return- this coefficient shows how many kopecks of net profit are in each monetary unit of revenue and is calculated as the ratio of net profit (the deduction of all taxes, cost and wage fund of personnel, other expenses) to total revenue.

Formula:

Net sales return = Net profit / Revenue

In order to independently calculate the data on net profitability from sales, it is enough to know the total number of units of products sold and income (after paying all relevant taxes and maintenance costs) that is not related to the non-operating activities of the enterprise (this can be exchange rate differences, investments, sales shares or other securities).

Analysis of results. Return on sales data helps a company calculate different kinds profit in the total number of revenues, but it also depends on the characteristics of the main activity of the enterprise.

Indicators for calculating profitability for several periods help to quickly manage processes economic activity organizations, quickly respond to market fluctuations and various economic methods influence the improvement of performance and continuous income generation.

Return on sales indicators are used to calculate operational activities, on long-term periods it is better not to use this indicator, since the sales market is very dynamic and you need to respond as quickly as possible to all its changes.

These indicators are effective for solving daily and monthly tasks and plans for the sale of products and goods.

How to increase sales profitability

The main ways to increase the profitability of sales are as follows:

• reduction of production costs (cost reduction);
• increase in production volumes and, due to this, gross proceeds;

But the enterprise, when introducing these improvements, must have the material and labor resources. Work in this direction requires the selection of highly qualified personnel, it is possible to conduct trainings among personnel according to new methods and practices that are effectively used in world economic practice.

First of all, you need to study the positions of competitors in the market, the range of products presented, pricing policy, promotions and, based on this, analyze what can affect the cost reduction of your products.

You need to compare not only offers on the market in your region, but also take into account the features and advantages of leading companies in the market. Perhaps the constant introduction of new technologies affects the low cost, then conduct a study on how profitable it is to introduce these technologies in your business and how quickly the innovations will pay for themselves.

As practice shows, despite initial costs for the development of personnel and the introduction of new products may seem large, but having made an economic analysis, taking into account planned indicators, these costs always justify themselves.

For full compliance market standards you need to constantly monitor the dynamics of sales markets, customer requirements, respond very quickly to all changes and fluctuations. Effective should be not only the price policy, but assortment. The assortment must be constantly updated and improved so that buyers see it all (people love new items and are interested in them). The quality of the products must also be appropriate.

To increase the profitability of sales, it is necessary to take into account not only economic factors and opportunities (cost reduction, profit optimization), but also an effective marketing policy. In most cases, economists recommend removing or reducing certain expense items to increase the profitability of sales, and marketers offer effective pricing policies.

The right combination of marketing and economic solutions guarantees a constant income from sold products, goods or services.

Profitability of sales- an economic indicator that reflects the company's income for each ruble received as a result of sales, or reflects the share of profit in total volume goods sold or products. Profitability of sales comes from the German concept of rentabel - profitable or profitable, and has long been an economic and marketing relative indicator of the economic efficiency of sales activities.

In practice, the effectiveness of sales is determined by the ratio of profitability of sales. Calculation formula return on sales ratio- the ratio of the company's net profit to revenue and multiplied by 100%

Coeff. Profit.Sales = (Profit / Revenue) * 100%

Western accounting system declares the concept Return on Sales (ROS) and gives the following calculation formula:

Operating Margin = Operating Income / Revenue

That is the ratio of operating profit to revenue. In other words, return on sales (ROS) - how much money from the volume of products sold is the company's profit.

Profitability of sales (Return On Sales, ROS) is an indicator of sales efficiency, a tool for controlling prices and costs. There are several formulas for calculating ROS. Read on, which formula to choose, how to analyze the data obtained. And also download a report that will help you control the profitability of sales.

What is return on sales

The formula for return on sales by net profit

Most often, return on sales is calculated by net income (ROS).

Net Sales - proceeds from the sale of products, net of indirect taxes (VAT and excise duty), for the same period.

However, when calculating instead of net profit, you can use:

• gross margin (sometimes isolated as a separate indicator - marginal profitability);
• operating profit;
• earnings before taxes and interest (EBIT);
• profit before taxes.

The choice of the numerator depends on the availability and complexity of obtaining data, the tax burden, and the goals of the analysis.

How to Calculate Operating Margin of Sales from Net Income

The operating profitability of sales in terms of net profit allows you to evaluate the effectiveness of the company's core business. It is determined by the formula:

where R N is the operating margin of sales in terms of net profit,

NPS - net sales profit,

TR - Revenue.

Return on sales formula by balance sheet

RP = line 2200 / line 2110,

where RP is the return on sales,

line 2200 - profit (loss) from sales,

line 2110 - sales revenue.

AT this case return on sales shows the share of profit from sales in the company's revenue.

Economic essence and normative value of the indicator

The profitability ratio of sales shows the share of profit in each ruble of revenue, it allows you to evaluate the effectiveness of sales, to understand how much profit each ruble of revenue will bring.

There are no generally accepted standards for the value of the indicator. You can focus on industry standards or indicators of competitors or similar enterprises. The top management of the company must independently determine the necessary standards, permissible deviations and response schemes for exceeding permissible deviations.

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Application practice

The indicator is used to analyze companies for comparison with competitors or in dynamics, to compare individual products or product groups, divisions, distribution channels (see more about ).

Analysis of profitability of sales for the company as a whole

If we compare organizations of similar business scale, then the rule is true for them: the lower the share of profit in revenue and, accordingly, the value of ROS, the worse the business is in comparison with a competitor, since there are relatively more expenses in revenue.

Analysis of the indicator for the purposes of assortment policy

Determining the profitability of the company as a whole may show an unfavorable picture, but will not give a complete answer about necessary actions, further research is needed. Comprehensive information about the causes of inefficiency will allow you to get an analysis in the context of products, commodity groups and directions.

Analysis for pricing purposes

Analysis of the indicator by product provides the information needed to adjust prices. There is also an additional effect that affects ROS, the scale effect. As sales increase, overhead costs are allocated to large quantity units of goods, which in turn increases ROS in the context of goods, product groups and operational directions. The share of overhead costs decreases, since overhead costs do not change following the growth in sales, while revenue grows, therefore, the value of profitability for the company also grows.

Calculation and analysis example

Suppose that in 2015 the organization made a profit of 10 million rubles, in 2016 the profit decreased to 8 million. At the same time, revenue in 2015 amounted to 120 million rubles, and in 2016 - 110 million rubles. Let's define ROS for two years in Table 1.

Table 1. Calculation of ROS for 2 years

At the end of 2016, ROS decreased by 8.3 - 7.27 = 1.03%, while profit fell by 20%, and revenue only by 8.3%, which indicates an increase in costs for the company as a whole. We noted the deterioration of the result, this is a reason to conduct a deeper study and look at ROS in the context of products (Table 2).

table 2. ROS by products

A very interesting situation: product "A" - revenue does not change, but profit falls, which leads to a fall in ROS. This is possible if the product is in the “maturity” stage and more and more promotional expenses are required to maintain sales, especially in a situation of unfavorable market conditions.

Product "B" shows a different trend - we have received a large decrease in the absolute values ​​​​of both profit and revenue, but at the same time ROS is growing. The reason is in proportion: profit fell less than revenue. Probably, despite the drop in sales, the company managed to optimize its costs, for example, the product is new for the company and the “learning” effect is affecting.

A high share of product “A” in revenue gives us a paradoxical result for the organization as a whole, a decrease in profitability for product “A” by 0.5%, with an increase in product “B”, it gives a drop in ROS as a whole by 1%.

In practice, it is possible to deepen the calculation not only in the context of products, but also in the context of managers, sales channels, branches - this will provide more information that is important for decision-making.

The degree of economic efficiency of a financial, labor or material resource characterizes such a relative indicator as profitability. Expressed as a percentage and widely used to measure performance commercial enterprise. There are many types this concept. Any of them is the ratio of profit to the asset or resource under study.

The essence of the concept of profitability ratio

The profitability ratio of sales shows the business activity of the enterprise and reflects the efficiency of its work. Evaluation of the indicator allows you to determine how much money from the sale of products is the profit of the company. What matters is not how much product was sold, but how much net profit the company earned. With the help of the indicator, you can also find the share of cost in sales.

The profitability ratio of sales is analyzed, as a rule, in dynamics. An increase or decrease in an indicator indicates various economic phenomena.

If profitability increases:

1. The increase in revenue occurs faster than the increase in costs (either increased sales volumes, or changed the assortment).
2. Costs are declining faster than revenue is declining (the company has either raised product prices or changed the assortment structure).
3. Revenue is growing, and costs are becoming smaller (prices have increased, assortment has changed, or cost rates have changed).

The first two situations are definitely favorable for the company. Further analysis is aimed at assessing the sustainability of this situation.

The second situation for the company cannot be called unambiguously favorable. After all, the profitability indicator has improved formally (revenue has decreased). To make decisions, analyze pricing, assortment.

If profitability declined:

1. Costs are rising faster than revenue (due to inflation, price cuts, increased cost rates, or changes in product mix).
2. The decrease in revenue is faster than the decrease in costs (sales fell).
3. Revenues are getting smaller and costs are getting bigger (cost rates have increased, prices have gone down, or the assortment has changed).

The first trend is clearly unfavorable. An additional analysis of the causes is needed to correct the situation. The second situation indicates the desire of the company to reduce its sphere of influence in the market. When a third trend is found, pricing, assortment, and cost control systems need to be analyzed.

How to Calculate Return on Sales in Excel

The international designation of the indicator is ROS. The return on sales ratio is always calculated from the sales profit.

Traditional formula:

ROS = (Profit/Revenue) * 100%.

In specific situations, it may be necessary to calculate the share of gross, balance or other profit in revenue.

Gross return on sales (margin) formula:

(Gross Profit / Sales Proceeds) * 100%.

This indicator shows the level of "dirty" money (before all deductions) earned by the company from the sale of products. Formula elements are taken in monetary terms. Gross profit and revenue can be found in the statement of financial results.

Information for calculation:

In the cells for calculating the gross margin, set the percentage format. We enter the formula:

Gross profit margin for 3 years is relatively stable. This means that the company carefully monitors the pricing procedure, monitors the product range.

Return on sales by operating income (EBIT):

(Operating profit / sales revenue) * 100%.

The indicator characterizes how much operating profit falls on the ruble of revenue.

((p. 2300 + p. 2330) / p. 2110) * 100%.

Data for calculation:

Calculate the operating profit margin - substitute the references to the required cells in the formula:

The formula for return on sales by net profit:

(Net profit / revenue) * 100%.

Net profitability shows how much net profit falls on the ruble of revenue. Both figures are taken from the income statement.

Let's show the profitability ratio of sales on the chart:

In 2015, the indicator is significantly reduced, which is regarded as an unfavorable phenomenon. Additional analysis needed assortment list, pricing and cost control systems.

A value above zero is considered normal. A more specific range depends on the field of activity. Each enterprise compares its sales profitability ratio and the standard value for the industry. It is good if the calculated indicator practically does not differ from the inflation rate.

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There are several options for determining the profitability of sales (ROS, Return on Sales) - one of the most important indicators for economic analysis activities. And in this article, we will talk about various formulas for calculating the return on sales.

From this article you will learn:

1. EBIT Formula
2. Balance Formula
3. Gross Profit Formula
4. What does the result obtained by the formula in percent / li>
5. What if the formula for the profitability of sales of products showed a fall

The classic formula for calculating return on sales

Most often, to determine the profitability and efficiency ratio, they refer to the formula for return on sales by net profit, considering it as the ratio of the company's net profit (NP) to sales revenue (TR) for the same period:

NPM=CHP/TR.

The indicators for the numerator and denominator are also calculated using separate formulas. Revenue is defined as the product of price (P, or Price) and sales volume, the number of units sold (Q, Quantity):

It is important to note that in order to include the result in the formula for return on sales, it will be necessary to subtract indirect taxes paid in the analyzed period from TR.

By calculating the revenue, you can highlight the net profit of the enterprise. To do this, all kinds of taxes (H), expenses (PrR), the cost of goods (TC, or Total Cost) are deducted from the proceeds and other income (PrD) is added:

PE=TR-TC-PrR+PrD-N.

Other expenses and income the company receives as a result of side activities, for example, trading in shares and securities, the difference from currency exchange, participation in the work of other organizations and the benefits received from this.

To determine the level of profitability of sales the formula may include the following indicators instead of the net profit value:

• earnings before tax and before interest (EBIT);
• operating profit from core activities;
• marginal profitability of the enterprise (or Gross Margin - gross margin).

The choice between these values ​​is determined by the tax burden, available sales data and the purpose of the calculation.

For example, the analysis may be aimed at investigating the effectiveness different types main activity in the field of production and sale or for the study individual goods and their groups. In this case, it is recommended to determine the profitability of sales using the gross margin formula, since the calculation of net profit will require the distribution of costs for each type of product, and this is a rather time-consuming task with indefinite utility.

The distribution of income tax is also not easy work, so for deep economic analysis in the NPM formula, instead of NP, you can use those parameters that will be easier to determine. Justified labor costs in this case will be the best solution.

EBIT Return on Sales Formula

To determine operating profitability, indicators of profit from operations, EBIT, return on sales and revenue (TR, or Total Revenue) can be used. At the same time, it is important not to confuse the concepts of operating and earnings before interest and taxes (Earnings Before Interest and Taxes).

ROS=EBIT/TR – is the formula for return on sales using the EBIT variable, which is determined according to Russian standards accounting as follows:

EBIT = line 2300 "Profit (loss) before tax" + line 2330 "Interest payable".

Earnings before taxes and interest are, in fact, intermediate between net and gross profits.

Formula for return on sales by balance sheet

The calculation of the efficiency and profitability of sales can also be made using the indicators of the balance sheet of the enterprise. In this case, profitability is obtained as a ratio, where the numerator is the indicator of unprofitability or profitability of sales (for example, in the company's balance sheet in form No. 1), and the denominator is revenue (for example, taken in form No. 2 or information on financial performance). So we get a list of interchangeable formulas:

RP = profit (loss) from sales / revenue (net) from sales,

RP = line 050 / line 010 f. #2,

RP = line 2200 / line 2110.

Gross profit margin formula

Gross margin of sales (or in English terminology- Gross Profit Margin, GPM) is calculated as a ratio, where the numerator is the value of gross profit (GRP), and the denominator is revenue (TR):

GPM=VP/TR.

The value of VP is usually calculated for reporting, therefore it is either taken from documents or determined independently. Gross profit in trade is what remains of the revenue when the total cost of production is subtracted from it:

VP=TR-TC.

Revenue is equal to the product of the price and the number of units sold ( TR=P*Q). Thus, gross profit can be calculated using the following formula:

VP=P*Q-TC.

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What does the result obtained according to the formula return on sales as a percentage

As mentioned at the beginning of the article, ROS is an indicator of how much profit a company receives from each individual monetary unit of revenue. In other words, profitability tells us about the effectiveness of sales, about how much money the company actually earns from each ruble received from the client.

To assess how high the profitability is, it would be logical to rely on the normative indicators for the market. However, it is not possible to determine them. So senior management is faced with the task of analyzing their industry and competitors in order to derive their own standards and acceptable fluctuations in results calculated using the formula for return on sales.

If you analyze the profitability of sales for the company as a whole

In comparison with competing enterprises, the obvious rule clearly works: the lower the profitability ratio (that is, the lower the percentage of profit in each ruble earned), the weaker your company works against the background of others. After all, this suggests that revenue mainly covers expenses and does not generate income.

Poor profitability indicators may indicate an unsuccessful pricing policy, an erroneous strategy in the market (for example, when an enterprise attracts attention by dumping). If the profitability ratio of sales according to the formula according to the balance sheet is too small or falls each time, then you should think about the marginality of products or about reducing the cost of it.

If you are analyzing profitability of sales for pricing purposes

The calculation of profitability of sales by a formula based on balance or other indicators is available not only for analyzing the company at the top level, but also for studying the effectiveness of individual areas and making reasonable decisions.

For example, an analysis of the profitability of products can suggest the direction of pricing policy. It is also worth noting how the ROS variable is interconnected with sales scaling: overhead costs are redistributed to all and do not grow significantly when the number of goods sold increases. And this means that the percentage of expenses decreases, and revenue increases, as a result of which the profitability ratio increases.

If you analyze the profitability of sales for the purposes of assortment policy

When the calculation is carried out according to the formula net profitability sales for the enterprise as a whole, then according to the data obtained, one can judge about big picture but hardly have all the necessary information to make adequate decisions.

In order for subsequent actions to work to improve the situation, research on individual product lines, groups and products is required. Their coefficients will allow you to rank products and find the weakest points.

But do not forget that each type of product has its own strategic role. For example, low ROS score for a company may arise due to a product or service that, in accordance with the BCG matrix, is a “money bag” (or “cash cow”). These are products with sustainable in high demand providing the company with a solid part of the revenue. So refusing such a product would be a serious mistake.

ROI formula in action (example)

For example, the company "Wings and Pilots" in 2016 received 30 million rubles of net profit, and in 2017 - only 23 million rubles. At the same time, the revenue was equal to 150 million rubles in 2016 and 140 million rubles in 2017. Let's calculate the profitability of sales using the formula using the example:

In 2017, Return on Sales decreased by 3.6%, while at the same time, profit decreased by 23.3%, and revenue decreased not so much - by 6.7%. This ratio of changes indicates that the company's costs have increased. With such a deterioration in the coefficient, it is recommended to study the profitability of individual products in more depth:

These calculations on the return on sales formula and the determination of changes in the subsequent period showed an interesting case: the ROS ratio of product X decreases, which happens because the revenue remains the same and the profit decreases. Such situations arise when the product has developed to "maturity". That is, promotion eats away more and more expenses.

At the same time, product Y showed a decline in all parameters, except for profitability. ROS is increasing because revenue has fallen more than profit. In fact, it is possible that Y sales began to fall, but Wings and Pilots effectively optimized spending. This happens with new products.

Product X accounts for most of the revenue, but this leads to the paradoxical situation in which a 2.9% drop in X's margin and a 1.4% increase in Y's ROS result in an overall decrease in the return on sales formula.

An in-depth analysis can be carried out not only for product lines or individual products, but also for network branches, touch points, and sales managers. Such studies provide data for strategic decisions.

If the product sales profitability formula showed a drop

Business aims to get maximum profit, which means that the company's strategy is based on this intention. However, any strategic decision aimed at increasing profitability faces several limitations: a limited amount of resources in the company as a whole and in particular. The market size is also the limit, because it is extremely difficult to sell more than the market is ready to accept.

If the strategy focuses on increasing the ROS ratio, then in fact we are talking about either reducing costs or increasing profits, or, in the best case, about the simultaneity of these factors. And it gives real results even with a revenue ceiling that is driven by the market.

At the same time, the decrease in the indicator obtained by the sales profitability formula can also be determined by the strategy, for example:

• increase in depreciation payments due to recent capital investments of the enterprise. Growth in spending reduces the Return on Sales ratio;
• maintaining the previous level of sales of a “mature” product (as in the example above) by injecting funds into its promotion. Thus, the share of costs in revenue is growing, while profitability is falling;
• market capturing strategy by dumping company. It is obvious that during dumping the profit decreases, but the enterprise achieves its goal.

More detailed factorial analysis of return on sales by formulas

To identify the reasons for the decrease in ROS in comparison with another reporting period or with the planned value, it is recommended to conduct a factor analysis.

Formula 1. Calculation of profitability of sales

For further analysis, the sales profitability formula must be detailed by decomposing the profit into indicators by which it can be calculated.

Formula 2. Detailed calculation of return on sales

Revenue, cost, and expenses can affect ROS, or RP, in a variety of ways. The change in Return on Sales, taking into account these factors, can be determined by the following formula for return on sales:

Formula 3. Calculation of changes in sales profitability under the combined influence of factors

Notation used	Units	Decryption	Data source
		Change in profitability ratio	Computing
			Formula 4
		Change in return on sales due to cost	Formula 5
		Change in profitability of sales due to commercial costs	Formula 6
		Change in return on sales management costs	Formula 7

We will sequentially consider all the formulas indicated in the previous table as data sources:

Formula 4. Calculation of changes in sales profitability due to changes in revenue

If the sales profitability formula and the change in the obtained coefficient showed a difference between the reporting periods by more than 1%, it is recommended to make a detailed factorial analysis of revenue.

Formula 5. Calculation of the change in sales profitability due to cost

Notation used	Units	Decryption	Data source
		Change in profitability of sales under the influence of cost	Computing
			Report on financial results (income and expenses) for the analyzed period
		Cost in the base period	Statement of financial results (income and expenses) for the base period
		Management costs in the base period	Statement of financial results (income and expenses) for the base period
			Statement of financial results (income and expenses) for the base period
		Revenue in the reporting period	Report on financial results (income and expenses) for the analyzed period

If, due to changes in the cost of production, the RP fell or increased by more than 1%, then this factor requires a separate study. It is important to analyze the reasons for the change in the cost price, since the parameters that determine it (output volume, structure, level variable costs etc.) have an indirect impact on the profitability of sales.

Formula 6. Calculation of the change in sales profitability due to selling expenses

Notation used	Units	Decryption	Data source
		Change in profitability of sales under the influence of commercial costs	Computing
		Revenue in the reporting period	Report on financial results (income and expenses) for the analyzed period
		Management expenses in the base period	Statement of financial results (income and expenses) for the base period
		Cost in the reporting period	Report on financial results (income and expenses) for the analyzed period
		Selling costs in the base period	Statement of financial results (income and expenses) for the base period
			Report on financial results (income and expenses) for the analyzed period

The formula for changing the profitability of sales under the influence of management costs has the following variable parameters:

Formula 7. Calculation of the change in sales profitability due to management costs

Notation used	Units	Decryption	Data source
		Change in profitability of sales under the influence of management costs	Computing
		Management expenses in the reporting period	Statement of financial results (income and expenses) for the base period
		Management expenses in the base period	Statement of financial results (income and expenses) for the base period
		Revenue in the reporting period	Report on financial results (income and expenses) for the analyzed period
		Cost in the same period	Report on financial results (income and expenses) for the analyzed period
		Selling expenses in the reporting period	Report on financial results (income and expenses) for the analyzed period

If the results of factor analysis indicate serious reasons for the decrease in the profitability of sales in your online business, then it is better not to wait for things to get worse, but to turn to specialists.