Home > Foundation > What is the break-even point and how to calculate it. Thesis: Estimation of break-even sales volume and profit of an enterprise

What is the break-even point and how to calculate it. Thesis: Estimation of break-even sales volume and profit of an enterprise

Break-even operation of a hotel enterprise depends on many factors, including the choice of the optimal volume of production of goods and provision of services and the appropriate pace of development. The amount of revenue must cover all costs incurred and ensure a profit. To solve this problem, there is the following analytical tool:

The coverage amount is the difference between revenue and total variable costs, i.e. the sum of fixed costs and profits. To calculate the amount of coverage, all variable costs(sometimes they are called

are direct costs), as well as part of the overhead costs, which depend on the volume of production and provision of services and are therefore classified as variable costs.

Average coverage refers to the difference between the unit price of a service and average variable costs. The average coverage reflects the contribution of a service unit to covering fixed costs and generating profit.

The coverage ratio is the share of the coverage amount in sales revenue. For an individual service unit, the coverage ratio is the share of average coverage in the price for that service unit.

The break-even point (the critical volume of service provision (sales)) is the sales volume at which the income received provides reimbursement for all costs and expenses, but does not provide the opportunity to make a profit, in other words, this is the lower limit on the volume of service provision at which the profit is zero .

The break-even point of a hotel, for example, is characterized by the following indicators:

1. Threshold (critical) sales volume is revenue that corresponds to the break-even point. Threshold (critical) volume of sales of rooms/services = Fixed costs for sales volume / Price - Average variable costs per room/service.

2. The profitability threshold is such revenue from sales at which the enterprise no longer has losses, but still does not make a profit. Profitability threshold, rub. = Critical sales volume of rooms/services x Price.

3. The margin of financial strength is the amount by which a hotel company can afford to reduce revenue without leaving the profit zone, or the deviation of actual revenue from the threshold. Margin of financial strength, rub. = Sales revenue, rub. - Profitability threshold, rub. The margin of financial strength can also be calculated in % if a percentage deviation is established.

4. Margin of safety is the difference between income from break-even sales and income from sales at a certain level of their volume.

A high level of safety margin indicates a relatively safe

Table 7.2

Initial data for calculation Indicators In units of measurement Revenue from the sale of rooms RUB 386,000. Variable costs RUB 251,000. Fixed costs 100,000 rub. Profit 35,000 rub. Price per room 386 rub. Average variable costs per room are 251 rubles. Sales volume is 1000 rooms. Thus, with a sales volume of 740 rooms and sales revenue of 285,700 rubles. the hotel reimburses all costs and expenses with the income received, while the enterprise's profit is zero. This state is called the “break-even point” or “ dead center" The margin of financial strength is 100,300 rubles.

The greater the difference between the actual volume of service provision and the critical one, the higher the “financial strength” of the hotel enterprise, and, consequently, its financial stability.

The value of the critical sales volume and the profitability threshold is influenced by changes in the amount of fixed costs, the value of average variable costs and the price level. Thus, a hotel enterprise with a small share of fixed costs can produce relatively fewer services than an enterprise with a larger share of fixed costs in order to ensure break-even and safety of its production. The margin of financial strength of such a hotel enterprise is higher than that of an enterprise with a larger share of fixed costs.

business position. Margin of safety, pcs. = Volume of sales of rooms/services - Critical volume of sales of rooms/services. Let us give the calculation of the break-even point using the data in table as an example. 7.2 and depict it in Fig. 7.1.

1. Threshold (critical) sales volume = 100,000 rubles: (386 - 251) rubles/number. = 740 numbers;

2. Profitability threshold = 740 rooms x 386 rubles/room. = 285,700 rub.

3. Margin of financial strength = 386,000 rubles. - 285,700 rub. = 100,300 rub.

4. Safety margin = 1000 numbers - 740 numbers = 260 numbers.

Sales revenue (thousand rubles)

Critical Volume Mara

rviiiiiri security

Rice. 7.1. Determining the break-even point The financial results of an enterprise with a low level of fixed costs are less dependent on changes in the physical volume of services provided. A hotel company with a high share of fixed costs should be much more concerned about a decrease in room occupancy.

Break even - this is the volume of sales at which the income received provides reimbursement of all costs and expenses, but does not provide the opportunity to make a profit, in other words, this is the lower limit volume of output at which profit is zero.

The break-even point is characterized by the following indicators:

1. Critical	Fixed costs for sales volume
(threshold) volume


sales, pcs.
sales, pcs.	per unit of production
	per unit of production
2. Rent threshold

	Critical sales volume, pcs. × Price
whiteness, rub.	Critical sales volume, pcs. × Price
whiteness, rub.

3. Financial reserve	Revenue from real	Profitability threshold
strength, rub.	tions, rub.	ness, rub.
4. Safety margin	Sales volume,	Critical volume
ness, pcs.		We eat sales, pcs.
ness, pcs.		We eat sales, pcs.

Profitability threshold- this is such revenue from sales at which the enterprise no longer has losses, but does not yet receive a profit. Financial strength margin- this is the amount by which a company can afford to reduce revenue without leaving the profit zone.

Let us give the calculation of the break-even point using the data in table as an example. 2.14:

Critical		100 million rubles.
Critical		100 million rubles.
sales volume		(386 – 251) thousand rubles/pcs.
		740 pcs. × 386 thousand rubles/pcs.	285.7 million rubles.
profitability		740 pcs. × 386 thousand rubles/pcs.	285.7 million rubles.
profitability
Financial reserve	386 million rubles. – 285.7 million rubles.		100.3 million rubles.
strength
		1000 pcs. – 740 pcs.
security		1000 pcs. – 740 pcs.
security

Thus, with a sales volume of 740 pcs. and sales revenue of 285.7 million rubles. the enterprise reimburses all costs and expenses with the income received, while the profit of the enterprise is zero, and the margin of financial strength is 100.3 million rubles.

Initial data for calculation		Table 2.14
Initial data for calculation
Indicator		Indicator value
Sales revenue, million rubles.
Variable costs, million rubles.
Fixed costs, million rubles.
Profit, million rubles
Price, thousand rubles/pcs.
Sales volume, pcs.
Average variable costs, thousand rubles/piece.

The greater the difference between the actual production volume and the critical one, the higher the “financial strength” of the enterprise, and, consequently, its financial stability.

The value of the critical sales volume and the profitability threshold is influenced by:

▪ change in the amount of fixed expenses;

▪ the value of average variable costs;

▪ price level.

Thus, an enterprise with a small share of fixed costs can produce relatively less products than an enterprise with a larger share of fixed costs in order to ensure break-even and safety of its production. An enterprise with a high share of fixed costs should be much more afraid of a decrease in production volume.

16.3. Financial stability of the enterprise. Leverage

Leverage is an indicator characterizing the relationship between the cost structure, capital structure and financial result. There are three types of lever:

operating;

financial;

conjugate.

Operational (production) lever (OP) – this is an indicator of potential

tional possibility of changing profits due to changes in the cost structure and sales volume:

	Gross Margin
	Gross Margin



		Price – Average Variable Cost
per unit =		Price – Average Variable Cost
per unit =			Profit per unit
products			Profit per unit

(Gross margin is the difference between sales revenue and variable costs).

Operating leverage shows by what percentage profit will change if sales volume changes by 1%.

For example, sales revenue at an enterprise is 400 million rubles; variable costs – 250 million rubles; fixed costs – 100 million rubles. Then the gross margin is equal to 150 million rubles, profit is 50 million rubles, and OP = 150 million rubles. / 50 million rub. = 3.0.

Thus, if sales volume decreases (increases) by 1%, then profit will decrease (increase) by 3%.

The effect of operating leverage comes down to the fact that any change in sales revenue (due to a change in volume) leads to an even stronger change in profit. This effect is associated with the disproportionate influence of fixed and variable costs on the financial result economic activity enterprises when production volume changes.

The force of influence of the operating lever shows degree of business risk, those. the risk of loss of profit associated with fluctuations in sales volume. The greater the effect of operating leverage, i.e. The greater the share of fixed costs, the greater the business risk.

Financial leverage – this is an indicator of the potential for changes in profit due to changes in the ratio of borrowed and equity funds. The effect of financial leverage characterizes degree of financial risk, those. the likelihood of loss of profit and decreased profitability due to excessive amounts of borrowed capital.

The first method of calculating the effect of financial leverage (EF 1) connects the volume and cost of borrowed funds with the level of return on equity:

EGF1 = (1 − SNP) × (ER− SRSP) × (ZK/SK),

where SNP is the income tax rate; ER is economic profitability (return on assets);

SRSP – average settlement rate percent; ZK – borrowed capital; SK – equity capital.

This indicator reflects a possible change (increase or decrease) in the return on equity associated with the use of borrowed funds, taking into account the payment of the latter:

if SRSP<ЭР, то у предприятия, использующего заемные средства, рентабельность собственных средств возрастает на величину ЭФР1 ;

if SRSP > ER, then the return on equity of an enterprise that takes out a loan at a given rate will be lower than that of an enterprise that does not do so by the amount of EFR1.

With the second calculation method, the effect of financial leverage (EF2) shows by what percentage the net profit per share will change if the profit (before interest and taxes) changes by 1%, i.e. it shows the possibility of increasing return on equity and net earnings per share through the use of credit:

The more expensive borrowed funds are for an enterprise, the greater the EFR and, consequently, the financial risk. This is especially dangerous when profits decrease.

Conjugate lever characterizes the combined impact of business and financial risks and shows by what percentage net profit will change when sales volume changes by 1%:

Conjugate leverage = Strength of operational leverage × Effect of financial leverage For the financial stability of an enterprise, it is important:

find the optimal relationship between fixed and variable costs in the structure of product costs;

choose a rational capital structure in terms of the ratio of equity and borrowed funds.

Introduction

The transition to market relations urgently dictates the need to study the activities of the enterprise. The state of the state’s economy and the level of well-being of the population depend on how efficiently the activities of enterprises are carried out. To determine the state of an enterprise, it is necessary to study its financial results in order to identify ways and reserves for increasing the efficiency of the enterprise.

The success of any company is measured by the amount of profit received and its growth. Profit growth is rightly associated with increased sales volumes. Just as there is no limit to perfection, there is no volume of sales and profit, having reached which, we can say: “no more necessary.” As they develop, the company’s “appetite” grows: first they develop their native region, then neighboring ones, then the whole country, and finally, we enter world markets. At each of these stages, there is a logical desire to sell as much as possible and make as much profit as possible. However, to successfully run a business, it is necessary not only to calculate how much the company will earn when achieving the planned sales volume, but also to clearly understand what minimum sales volume is required to ensure break-even operation.

Large role in justification management decisions In business, marginal analysis plays a role, which includes break-even analysis and allows you to calculate the amount or number of sales at which income equals expenses. At the same time, the business does not incur losses, but does not make profits. Sales below the break-even point result in losses; sales above the break-even point generate profits. The break-even point is the threshold that a company needs to cross in order to survive. Therefore, many economists tend to call the break-even point the profitability threshold. The higher the profitability threshold, the more difficult it is to cross it. With a low profitability threshold, it is easier to survive a drop in demand for products or services and to refuse unreasonably high selling prices. Reducing the profitability threshold can be achieved by increasing the gross margin (increasing the price and / or sales volume, reducing variable costs) or reducing fixed costs.

In practice, the head of any enterprise has to make many different management decisions. Every decision made regarding the price, costs of the enterprise, volume and structure of product sales ultimately affects the financial results of the enterprise. A simple and very accurate way to determine the relationship and interdependence between these categories is to establish the break-even point - determining the moment from which the enterprise’s income completely covers its expenses.

Thus, the theoretical and practical significance of break-even analysis for assessing current state and the prospects for the functioning of the enterprise determined the relevance of the chosen topic.

Well-known foreign and domestic economists paid considerable attention to the issue of estimating the break-even point, including: L.S. Vasiliev in the work “Financial Analysis”, A.A. Kanke “Economic Analysis”, A.A. Pavlova “Marginal analysis and its application in enterprises”, G.V. Savitskaya “Methodology for complex analysis of economic activity”, A.D. Sheremet "Enterprise Finance". The above authors comprehensively substantiated the methodology for estimating the break-even point, identifying the factors influencing this indicator and the safety zone.

The purpose of this thesis is to assess the factors influencing changes in the sales volume and profit of the enterprise. To achieve this goal, the following main tasks were formulated:

Consider the concept and tasks of analyzing the break-even performance of an enterprise;

Justify the methodology for assessing marginal profit and factors influencing the break-even level of the enterprise;

Assess changes in the enterprise’s marginal profit;

Assess the factors influencing the break-even of the enterprise;

Justify measures to reduce the break-even level of the enterprise.

As theoretical basis The research included encyclopedic sources on the issues of assessing the break-even activities of enterprises, regulatory materials, legislative sources, works of foreign and domestic economists such as: Blank I.A., Bocharov V.V., Vasina A.A., Plaskova N.S. ., Gubin V.E., Zenkina I.V., Korimov V.E., Bannakhova O., Neiman A.M., Chitaya G.O., and also publications in periodicals, accounting reporting of the analyzed enterprise.

The object of the study is the production and economic activities of the limited liability company Tatneft-AlmetyevskRemService.

The subject of the study is the indicators of break-even production volume and profit of the enterprise.

As methodological basis research used such general scientific methods as abstraction, generalization, horizontal and vertical comparison, methods of chain substitutions, absolute and relative differences, etc.

The practical significance of the thesis lies in the development of recommendations for improving the management of break-even activities of the enterprise. Some proposals deserve attention and can be used in the practical activities of Tatneft-Al-metyevskRemService LLC.

Thesis structurally consists of an introduction, three chapters, a list of used sources and literature, and applications.

The first chapter of the work examines the theoretical and methodological aspects of assessing the break-even performance of an enterprise.

The second chapter presents an assessment of changes in the break-even performance of the enterprise Tatneft-AlmetyevskRemService LLC.

In the third chapter, based on a practical analysis of the break-even activity of LLC Tatneft-AlmetyevskRemServis, recommendations are presented for reducing the break-even level at the enterprise under study.

1 Theoretical and methodological aspects of assessing the break-even performance of an enterprise

1.1 Concept and tasks of analysis of break-even activity of an enterprise

The transition of Russian society from a planned economy to market relations created new economic conditions functioning of the enterprise. Product production planning, the production process itself, pricing and sales of products are constantly subject to analysis and study. The products produced must meet market demand, the price must meet consumer expectations, and production must be profitable. Otherwise, the company may be on the verge of bankruptcy.

Large enterprises are in a particularly difficult situation: production is well established, the area is huge, the staff is large, the equipment capacity is used at half, there is not enough working capital, the cost of production is rising, and sales, on the contrary, are falling.

AND main goal for an enterprise in such a situation, it is to be able to survive: save jobs, increase the competitiveness of products, sell them and make a profit, for which a commercial enterprise exists. Profit is the difference from comparing the amounts of income and expenses. An excess of income over expenses means an increase in the organization's property - profit, and expenses over income - a decrease in property - a loss. This means that the company must reduce costs as quickly as possible. You can achieve this goal:

Firstly, due to the cost of raw materials. But the cost of raw materials only increases from year to year, rather than decreasing; due to failure to pay on time, some suppliers do not want to work with debtors at all;

Secondly, due to the reduction wages. But this state of affairs does not suit the working staff. The salary level must be competitive in its region and industry if the enterprise is interested in good personnel;

Thirdly, due to other expenses. Practice shows that it is difficult to reduce them, but even if it is possible, their share in the cost of production is small compared to the above costs. Trying to make a larger profit by increasing the selling price of products (to set as high a profit margin as possible), the enterprise makes the products uncompetitive. The result of such an experiment is the loss of a certain share of the sales market, as a result - an increase in overhead costs and a decrease in income in general.

Profit;

We present a graphical representation of the definition of break-even conditions in Figure 1.

Figure 1 shows break-even production - BP, as well as the break-even value - VB, according to the angle of the curves displaying costs and sales, and the position of the equilibrium point in relation to full power, the analyst can identify potential weak points.

Figure 1 – Determination of break-even conditions

In the search for reserves for increasing the economic efficiency of production, forecast assessment for the prompt adoption of management decisions to eliminate identified shortcomings and omissions becomes particularly relevant.

Marginal analysis, as one of the many techniques in searching for reserves for increasing the economic efficiency of production, first appeared abroad, in capitalist countries in which commodity producers built their business activities exclusively in a market economy.

A major role in justifying management decisions in business is played by marginal analysis, the methodology of which is based on studying the relationship between three groups of the most important economic indicators: costs, volume of production (sales) of products and profit and predicting the value of each of these indicators at a given value of the others.

This method of management calculations is also called break-even or income assistance analysis. Marginal analysis was developed in 1930 by American engineer Walter Rautenstrach as a planning method known as critical production schedule. It was first described in detail in the domestic literature in

1971 N.G. Chumachenko, and later A.P. Zudilin.

The methodology is based on the division of production and sales costs depending on changes in production volume into variable and constant and the use of the category of marginal income.

Margin analysis (break-even analysis) is widely used in countries with developed market relations. It allows you to study the dependence of profit on a small circle of the most important factors and on this basis manage the process of forming its value.

Margin analysis is carried out for the following purposes:

– assess the profitability of production and trading activities;

– predict the profitability of an enterprise based on the “Margin of Financial Strength” indicator;

– assess business risk;

– choose the best ways out of the crisis;

– evaluate the results of the initial period of operation of a new company or the profitability of investments made to expand fixed capital;

– develop the most beneficial assortment policy for the enterprise in the production and sale of goods.

The main tasks of marginal analysis are to determine:

Break-even sales volume (profitability threshold, cost recovery) at given ratios of price, fixed and variable costs;

Security (break-even) zones of the enterprise;

Necessary sales volume to obtain a given value

Profit;

The critical level of fixed costs at a given level of marginal income;

The critical selling price for a given sales volume and the level of variable and fixed costs.

With the help of marginal analysis, other management decisions are justified: the choice of options for changing production capacity, product range, prices for a new product, equipment options, production technology, purchasing components, assessing the effectiveness of accepting an additional order.

Carrying out calculations using the marginal analysis method requires compliance with a number of conditions:

The need to divide costs into two parts: variable and constant;

Variable costs change in proportion to the volume of production (sales) of products;

Fixed costs do not change within the relevant (significant) volume of production (sales) of products, i.e. in the range of business activity of the enterprise, which is established based on the production capacity of the enterprise and the demand for products;

Identities of production and sales of products within the time period under consideration, i.e. stocks finished products do not change significantly;

Production efficiency, product price levels and consumed production resources will not be subject to significant fluctuations throughout the analyzed period;

Proportionality of revenue receipts to the volume of products sold.

Since the above assumptions are not always met in practice, the break-even point should also be the subject of a sensitivity analysis under various fixed and variable costs and selling prices.

Like the first break-even point, the second also corresponds to the critical volume of revenue K0. At this point, equality of fixed costs and marginal income occurs. In both cases, beyond the break-even points, the enterprise receives profit (income), and the same one.

Break-even analysis is also important for assessing the state of the enterprise and developing a strategy for its development. One of the serious problems of managing a company is assessing the consequences of increasing or decreasing the price of a product. In a graphical representation, a change in the price of a product will cause the slope of the sales line to decrease, and we can observe how these changes will affect profits.

Using break-even analysis, you can calculate the level of the safety margin, which is one of the risk indicators. The lower the safety reserve value, the higher the risk of falling into the loss range.

When producing and marketing several products simultaneously, it is necessary to take into account that they have different prices and variable costs and, therefore, their shares of contributions to cover total costs differ. In this case, the break-even point depends on the share of each product in the mixed sales volume.

Thus, break-even analysis allows you to determine:

The required sales volume to cover costs and generate the required profit;

The dependence of the enterprise’s profit on changes in trading prices, variable and fixed costs;

The value of each product as a share of covering total costs.

The advantages of this method include:

Ease of use;

Visibility when planning profits;

Illustrativeness in demonstrating the impact of operational changes on the profitability of the enterprise;

Help in identifying optimal ratio fixed and variable costs.

Thus, in order to control the formation of profit, a break-even analysis is carried out. Analysis of the break-even of an enterprise allows the entrepreneur and the management of the enterprise to reliably assess the current situation and prospects for business development.

Having considered the concept and tasks of analyzing break-even activity, it is advisable to move on to studying marginal income and factors influencing the break-even level of an enterprise.

1.2 Marginal profit and factors influencing the break-even level of the enterprise

The marginal profit of industrial enterprises has various sources formations that can be located both in the external and internal environment. Grouping marginal profit by objects of occurrence and various signs object allows you to study the influence

external and a number of internal factors affecting the formation of marginal profit.

Thus, grouping marginal profit by customer addresses makes it possible to determine the most profitable region for the sale of goods; grouping by sales agents selling goods allows you to identify agents who form the largest amount marginal income for the enterprise and justify the remuneration policy to stimulate sales by changing the form of remuneration for sales agents.

1971 N.G. Chumachenko, and later A.P. Zudilin.

The methodology is based on the division of production and sales costs depending on changes in production volume into variable and constant and the use of the category of marginal income.

Margin analysis (break-even analysis) is widely used in countries with developed market relations. It allows you to study the dependence of profit on a small range of the most important factors and, on the basis of this, manage the process of forming its value.

Margin analysis is carried out for the following purposes:

– assess the profitability of production and trading activities;

– predict the profitability of an enterprise based on the “Margin of Financial Strength” indicator;

– assess business risk;

– choose the best ways out of the crisis;

– evaluate the results of the initial period of operation of a new company or the profitability of investments made to expand fixed capital;

– develop the most beneficial assortment policy for the enterprise in the production and sale of goods.

The main tasks of marginal analysis are to determine:

Break-even sales volume (profitability threshold, cost recovery) at given ratios of price, fixed and variable costs;

Security (break-even) zones of the enterprise;

Necessary sales volume to obtain a given value

Profit;

The critical level of fixed costs at a given level of marginal income;

The critical selling price for a given sales volume and the level of variable and fixed costs.

Carrying out calculations using the marginal analysis method requires compliance with a number of conditions:

The need to divide costs into two parts: variable and constant;

Variable costs change in proportion to the volume of production (sales) of products;

Identities of production and sales of products within the time period under consideration, i.e. finished goods inventories do not change significantly;

Production efficiency, product price levels and consumed production resources will not be subject to significant fluctuations throughout the analyzed period;

Proportionality of revenue receipts to the volume of products sold.

The methodology is based on the division of production and sales costs depending on changes in production volume into variable and constant and the use of the category of marginal income.

Figure 3 – Graphs of the dependence of types of costs on changes in production volume

Progressive costs change faster than the level of business activity, such as piece-rate wages. Degressive costs, on the contrary, change more slowly than production volume, for example, costs for auxiliary materials, electricity for technological needs.

Regressive costs, on the contrary, are with the volume of production in inverse relationship: They decrease when business activity increases. There are also mixed costs containing both variable and constant components, for example, wages of sales department employees, part of whose wages is stable (time-based), and the other depends on the volume of goods sold (piece-rate).

To identify costs depending on their response to changes in production volumes, the so-called cost response coefficient is used - the ratio of the growth rate of a particular cost item to the growth rate of production volume.

It is considered important in terms of finding reserves for saving costs on production and sales of products to consider the dependence of the specific indicators of fixed and variable costs per unit of product.

Obviously, with an increase in production volumes, savings are generated on fixed costs. If we assume that manufactured products are sold at a price higher than their cost, then saving on fixed costs in the context of growing production volumes is a factor that directly affects profit growth. In addition, an increase in production requires an increase in purchases of raw materials, materials, which, as a rule, results in an increase in the purchase batch. In such a situation, you can count on a reduction in purchase prices, which will lead to additional savings and increased profits.

With a significant increase in business activity, when expanding the scale of business requires additional fixed costs (for example, depreciation of additionally purchased equipment, maintenance of management personnel, etc.), specific fixed costs will certainly increase, but as production volumes further increase, their value will again continue to be decline.

Using marginal analysis, it is possible to search for the most profitable combinations between variable costs per unit of production, fixed costs, price and sales volume.

An important factor influencing the profitability of individual marginal profit objects is the amount and structure of partial cost. The amount of marginal income (profit) directly depends on the amount of partial cost. The predominance of variable costs in the structure of incomplete cost indicates the fact that a significant sales volume is not required to achieve break-even for a given marginal income object. The predominance of direct fixed costs in the structure of incomplete cost indicates the need to increase sales volume to recover them.

One of the conditions for justifying management decisions on the product range is to assess the structure of direct fixed costs in the context of individual objects of marginal profit. The proportion of direct fixed costs attributable to an individual facility may be so large that a significant increase in sales volume may be required to recover them (i.e., to achieve break-even for the facility).

The proposed analysis methodology also allows us to change approaches to assessing the break-even of economic activity of enterprises and more fully study the composition of factors influencing break-even.

To calculate the break-even volume of production for certain types of products, the economic literature uses the indicator of marginal income (profit), calculated based on the direct costs of producing a given type of product. The volume of production for a particular type of product is considered break-even if sales revenue covers variable and direct fixed costs for the production of this type of product. However, since marginal income is generated not only in the main activities of industrial enterprises, the break-even sales volume must be calculated for all objects of marginal income.

, (1)

Formula (1) is a deterministic factor analysis model. Application to her various methods factor analysis (chain substitutions, integral method) allows you to calculate the impact of direct fixed costs and the share of marginal income on variable costs in the revenue from a separate object of marginal income on the change in the break-even point of the object.

N – production volume;

P N – profit from sales.

Production volume;

Inflation rate;

where is the revenue of the reporting year in comparable prices;

B 0 – revenue for the reporting year;

I c – price index for the reporting year.

– Calculation of revenue growth due to changes in production volume. It is necessary to subtract the revenue of the previous year from the revenue of the reporting year in comparable prices:

, (4)

where B p is the revenue of the previous year.

– Calculation of revenue growth due to price changes. From the actual revenue of the reporting year, it is necessary to subtract the revenue of the reporting year in comparable prices:

, (9)

where ΔВ c is the increase in revenue for the reporting year due to price changes.

To assess the influence of factors on changes in the break-even of an enterprise’s economic activity, it is proposed to evaluate the impact of the break-even of individual objects of marginal income:

where B i is the break-even sales volume for the i-th object of marginal income,

Zpr.post i – direct fixed costs attributed to the cost of the i-th object of marginal income;

УМi per – the share of marginal income on variable costs in the revenue from the i-th object.

Formula (1) is a deterministic factor analysis model. The application of various methods of factor analysis (chain substitutions, integral method) allows one to calculate the influence of direct fixed costs and the share of marginal income on variable costs in

revenue from a separate object of marginal income to change the break-even point of the object.

Marginal income for the entire issue is the difference between sales revenue and variable costs or the sum of fixed costs and sales profit:

MD = N– S PER = P N + S POST, (2)

where MD is the marginal income for the entire production output;

N – production volume;

S PER – total variable costs;

S POST – total fixed costs;

P N – profit from sales.

The main source of profit for a successful organization is marginal profit, factor analysis of which, performed using the absolute difference method based on information from Form No. 2, allows us to determine the impact on profit of the following factors:

Production volume;

Inflation rate;

Specific costs or resource intensity (costs per 1 ruble of revenue).

The initial data for the analysis is the following information:

– inflation rate for the reporting year or price growth index;

– revenue and profit from sales for the reporting and previous year from form No. 2.

Calculations are carried out in the following sequence.

– The calculation of revenue for the reporting year in comparable prices is determined by dividing the revenue for the reporting year by the price index:

where P 0 – marginal profit in the reporting year;

P p – marginal profit in the previous year.

In the process of interpreting the results obtained, it is necessary to identify

the main factors that determined the change in marginal profit and evaluate them.

Calculating the break-even of individual marginal income objects allows you to more accurately substantiate management decisions depending on the profitability of individual business operations, taking into account not only the amount of marginal income for each object, but also the amount of direct fixed costs included in the cost of the object. Summing up the break-even sales volumes for each marginal income object makes it possible to determine the sales volume at which the company reimburses all direct (in relation to individual margin objects) fixed costs:

Where – break-even sales volume at which direct (in relation to various objects of marginal income) costs are reimbursed.

Formula (13) is an additive factor model that allows you to evaluate the impact of changes in the break-even of individual marginal income objects on the break-even of the entire economic activity of the enterprise, calculated using direct costs.

However, achieving break-even sales volume for direct costs does not yet mean achieving break-even sales for the enterprise as a whole, since in order to make a profit it is necessary to reimburse indirect costs related to all business activities.

To determine the break-even sales volume for the enterprise as a whole, formula (14) is proposed:

,(14)

where B is the break-even sales volume for the enterprise as a whole;

UVMD per – share of gross marginal income on variable costs in revenue;

Z kos - indirect costs for carrying out economic activities.

The application of formula (14) allows us to more fully study the composition of factors and measure their influence on the break-even of economic activity (the influence of the amount of indirect costs, the break-even of individual objects of marginal income, direct fixed costs).

Internal environmental factors affecting the break-even level of production are presented in Appendix A.

However, the realities of life are more complex than these assumptions. In order for the mathematical tools of CVP analysis to become effective and produce reliable results, a certain adaptation of the proposed activity to the basic model is necessary.

In particular, the main factors of economic activity must correspond to the conditions of mass production with a short production cycle. Production and sales technologies are determined by the entrepreneur's policy on setting selling prices. Such conditions are, to one degree or another, inherent in most Russian enterprises.

The main predictable factors causing risks to planning results are:

Variability of demand, which leads to fluctuations in revenue and results financial activities generally;

Variability in the selling price of an enterprise's products caused by competition;

Variability of production costs, which affects

on the income received and leads to their instability;

A fall in production volumes and, as a consequence, sales as a result of the deterioration and use of production resources.

The abscissa axis shows the volume of sales Q in natural units (if we are talking about one type of product);

Along the y-axis are costs (fixed - FC, variable - VC, total - TC), as well as revenue from sales of products S.

In accordance with the accepted assumptions, revenue from product sales is graphically represented by the straight line S = p * Q, and total costs (operating costs) are represented by the straight line TC = FC + VQ.

Break-even analysis methods make it possible to study the dependence of profit on a small range of the most important factors: the set prices, the structure of products sold by type, its assessment at the level of variable costs and the total amount of fixed costs. Thus, this dependence is a methodological basis for identifying and analyzing possible negative consequences results of planned activities.

Figure 9 – Risk zones for the consequences of planning results

The break-even point determines two areas of planned activity: unprofitable and profitable production. Each of these areas corresponds to certain zones and types of risks and the conditions for their occurrence.

The boundary of the zone where the risk of loss of solvency appears is the point of non-profitability (point D in Fig. 9). This point characterizes such indicators of the future production plan when sales revenue can cover only the fixed costs of the enterprise.

2. In the area of profitable production, there may be a risk of a decrease in financial strength - the stability and independence of the enterprise. The boundary of these types of risks is the safety zone, defined by the safety edge (point B in Fig. 9).

The safety margin represents the difference between the planned and threshold (critical) sales volume and characterizes the margin of financial strength. This reserve shows how much during manifestation external factors risk, you can reduce the performance of the production plan without incurring losses.

Thus, the methodology for analyzing break-even taking into account marginal profit takes into account the relationship between the factors of production volumes, costs and profits. The considered method makes it possible to assess the consequences of risks of planning results. But this additionally raises the problem of determining the limit values of those parameters production activities, which affect the position of the break-even point of the enterprise and the dynamics of risk zones. A more accurate calculation of these factors ensures a high level of planning and forecasting of the financial results of an industrial enterprise.

Having examined the marginal profit and factors influencing the break-even level of an enterprise, we will move on to studying the methodology for assessing the break-even of an enterprise.

1.3 Methodology for assessing the break-even performance of an enterprise

Break-even analysis methods are especially relevant when the organization experiences unfavorable market conditions due to a drop in demand for products and market saturation. Using its results, the management of the enterprise has the opportunity to react quickly, varying prices, adjusting the production program and at the same time knowing what financial consequences can be expected from this, i.e. “CVP-analysis” serves as the main tool for operational planning and control of an organization’s production and sales activities, allowing it to predict profits depending on the behavior of costs, production volume and prices.

Using break-even analysis, it is possible to find the most profitable combinations between variable costs per unit of production, fixed costs, price and sales volume.

Break-even point (equilibrium point, dead point, critical point, profitability threshold) is a situation in which the enterprise’s activities bring neither losses nor profits.

Sales below the break-even point mean losses for the company, above the equilibrium point means profit.

When conducting break-even analysis (Break-evenAnalysis), two analysis methods are traditionally used to determine the profitability threshold and its modeling:

Equation method;

Graphical method.

Let us present the initial equation for analysis. The volume of product sales is related to the cost and profit from sales by the following ratio:

P N = N – S, (19)

where P N – profit from sales;

N – production volume;

S – cost (expenses).

If the enterprise operates profitably, then P N > 0, if it is unprofitable – P N< 0. При P N = 0 у предприятия нет ни прибыли, ни убытка, и выручка от продаж равна себестоимости.

This state is fixed at the point of critical sales volume, which is the border point of two opposite states: profitability and unprofitability of economic activity.

For the critical point the following equality holds:

N = Sor N = S POST + S PERM, (16)

where S POST – total fixed costs;

S PER – total variable costs.

We present a graphical representation of the relationships between indicators of production volume, costs and profits in Figures 6 and 7.

The first graphical method for determining the critical break-even point is based on the equality of marginal income and fixed costs when the threshold value of sales revenue is reached. After passing the break-even point, the company will begin to make a profit.

The second graphical method for calculating the profitability threshold is based on the equality of sales revenue and total costs when the profitability threshold is reached. The result will be a threshold value of physical production volume.

When determining the boundaries of the risk zones of the consequences of planning results, the main elements of the break-even model are:

Volume of products sold (Q);

Price per unit (p);

Variable costs per unit of production (v);

Fixed costs (FC);

Variable costs (VC = v * Q);

Sales revenue (S = p * Q);

Marginal income (VM = S – VC);

Marginal income per unit of production (BM 1 = р – v);

Earnings before interest and taxes (PR p = Q (p– v) – FC).

Figure 9 shows the risk zones for the consequences of planning results. Graphically, the break-even model is two-dimensional:

We present a linear graph of breakeven in Figure 7.

From Figure 7 it follows that the area of the lower left triangle corresponds to the losses of the enterprise before it reaches the profitability threshold, the area of the upper right triangle corresponds to the mass of profits.

This equation is fundamental for obtaining the necessary estimates.

1. Calculation of critical production volume:

q cr (z i – s i per) = S POST (18)

It allows you to find the equilibrium point, or break-even, the so-called critical sales volume - the point at which the total revenue is equal to the total costs. The amount of these costs consists of the total amount of fixed costs and those variable costs that arise as a result of the production of products, the sale of which must fully cover the cost of production and sales.

Break-even point (equilibrium point, dead point, critical point, profitability threshold) is a situation in which the activity of an enterprise brings neither losses nor profits.

Figure 7 – Representation of the critical break-even point (second graphical method)

where q to p is the critical volume of production, units of products;

2. Marginal income for the entire issue is the difference between sales revenue and variable costs or the sum of fixed costs and sales profit:

MD = N– S PER = P N + S POST, (20)

where MD is the marginal income for the entire production output;

N – production volume;

S PER – total variable costs;

S POST – total fixed costs;

P N – profit from sales.

3. Profitability threshold (calculation of the critical volume of sales revenue).

If revenue is represented as the product of the sales price per unit of product (z i) and the number of units sold (q), and variable costs are recalculated per unit of product, we obtain a detailed equation:

z i * q i = S POST + s i per * q, (17)

where z i is the unit price of the product;

q i – number of units of production;

S POST – total fixed costs;

s i per – variable costs per unit of product;

q – production volume.

where PR is the profitability threshold;

MD i – marginal income per unit of product, rub.

z i – unit price of the product;

N – production volume.

Factor analysis of production break-even is carried out using the chain substitution method:

– break-even production in the base period:

where S 0 POST – total fixed costs in the base period;

MD 0 – marginal income of the base year;

N 0 – production volume of the base year.

– break-even production in the base year with constant costs of the reporting period:

(24)

where S 1 POST – total fixed costs in the reporting period.

– break-even production in the reporting period:

(29)

where MD 1 is the marginal income of the reporting period;

N 1 – production volume of the reporting period.

4. Calculation of the financial safety margin (safety indicator).

The margin of financial strength is the difference between the actual sales volume and the critical sales volume; it characterizes the degree to which the threshold value of production volume is overcome and the reality of making a profit from sales.

It is defined in monetary terms as the difference between the expected and equilibrium sales volume:

(26)

or as a percentage of expected sales:

(27)

The analytical significance of break-even analysis methods as a profit planning tool follows from the following provisions:

– change in both selling price and variable costs per unit

products leads to a change in marginal income and, accordingly, the equilibrium point (critical production volume);

– the lower the equilibrium point, the lower the risk of doing business and the safer the investment, all other things being equal;

– a high safety score means low operational risk, since a possible sharp decline in sales can be compensated for, and in this case no losses will occur;

– for a company with a multi-product production, the sales structure as a whole often seems more important than the market share occupied. The emphasis on producing products with high profit margins helps to achieve maximum total profit for the company.

Based on the above, we can draw the following conclusion.

The break-even analysis technique taking into account marginal profit takes into account the relationship between the factors of production volumes, costs and profits. The considered method makes it possible to assess the consequences of risks of planning results. But at the same time, the additional task of determining the limit values of those parameters of production activity that affect the position of the break-even point and the dynamics of risk zones arises. A more accurate calculation of these factors ensures a high level of planning and forecasting of the financial results of an industrial enterprise.

Break-even analysis, or CVP analysis, is an effective tool in the decision-making process. It allows you to trace the relationship between “costs - volume - profit” and evaluate the objectivity of management decisions on organizing sales, forming a production program, determining the future price of a unit of production, choosing suppliers of raw materials, etc. The main indicators of the analysis are marginal profit, marginal profit rate, critical point.

Having examined the theoretical and methodological aspects of assessing the break-even performance of an enterprise, let us move on to a practical analysis of the break-even performance of the enterprise Tatneft-Almetyevsk-RemService LLC for the period 2007–2009.

2 Assessing the break-even performance of an enterprise

2.1 Brief description of the financial and economic activities of Tatneft-AlmetyevskRemService LLC

Limited Liability Company "Tatneft-AlmetyevskRemServis" (hereinafter LLC "TN-AlmRS") was created in 1973.

Legal address: 423490, Republic of Tatarstan, Almetyevsk, st. Proizvodstvennaya 2.

Main activity – major renovation wells The main customers of Tatneft-AlmetyevskRemService LLC are: oil and gas production departments "Almetyevneft", "Elkhovneft", "Yamashneft", "Zainskneft", "Nurlatneft", as well as closed joint-stock companies "Troitskneft", "Tatnefteotdacha", "RITEK", " Sheshmaoil", "Ideloil", "Geology", limited liability company "Nefteresurs", joint stock company construction and installation enterprise "Neftegaz", and others.

In Table 1, we consider the economic performance indicators of the enterprise Tatneft-AlmetyevskRemServis LLC for the period 2007–2009.

Table 1 – Assessment of economic activity of Tatneft-AlmetyevskRemServis LLC for 2007–2009.

Analyzing the economic performance indicators of TN-AlmRS LLC, we note that sales revenue in the analyzed period had a non-unidirectional trend: for example, in 2008 compared to 2007, the increase in revenue amounted to 149,294 thousand rubles. At the same time, the revenue growth rate was 7.9%, and in 2009 compared to 2008, revenue decreased by 194,619

thousand rubles or by 9.1%.

Since variable costs grow in direct proportion to the volume of services provided, the cost price has increased accordingly, the increase in 2008 compared to 2007 amounting to 189,929 thousand rubles. or 10.66%, in 2009 compared to 2008, due to a decrease in the volume of sales of services, the cost price tended to decrease: by 91,703 thousand rubles. or 4.66%.

Dynamics of the main indicators of economic activity of TN-AlmRS LLC for the period 2007–2009. presented in Figure 8.

Figure 8 – Dynamics of economic indicators of the activities of Tatneft-AlmetyevskRemService LLC for 2007–2009.

Net profit in the analyzed period had a negative downward trend: in 2008, this indicator decreased by 29,991 thousand rubles. or by 24.76%, and in 2009 the decrease amounted to 68,893 thousand rubles. or 76.61%. In general, the net profit of TN-AlmRS LLC in the analyzed period 2007–2009 decreased by 98,484 thousand rubles. or 82.4%, which is negative point in the activities of the enterprise TN-AlmRS LLC.

According to Figure 8, we note that in the analyzed period there was a decrease in all the indicators under consideration, which indicates a decrease in activity volumes as a result of a decrease in business activity of the enterprise TN-AlmRS LLC.

An increase in accounts receivable is assessed negatively. So in 2007 accounts receivable amounted to 103,994 thousand rubles, in 2008 – 162,120 thousand rubles, having increased by 98,126 thousand rubles. or by 199.89%. In 2009, an increase in accounts receivable was observed in the amount of 102,189 thousand rubles. or 163.03%.

Dynamics of the ratio of receivables and payables of TN-AlmRS LLC in 2007–2009. is shown in Figure 9.

Figure 9 – The ratio of the value of receivables and payables of LLC Tatneft-AlmetyevskRemServis for 2007–2009.

According to Figure 9, we note that the accounts receivable of TN-AlmRS LLC throughout the entire analyzed period are greater than the accounts payable, which can be regarded as a negative trend in the enterprise’s activities, since it may be necessary to attract additional financing for the organization’s activities.

Let us analyze the property status of the enterprise TN-AlmRS LLC for the period 207–2009, and present the results of the analysis in Table 2.

Table 2 – Composition, structure and dynamics of assets and liabilities of Tatneft-AlmetyevskRemService LLC for 2007–2009.

Indicator	Amount, thousand rubles			Change 2009 to 2007		Specific gravity, %
Indicator	2007	2008	2009	Absolute (+,–)	Relates. (%)	2007	2008	2009	Abs.measurement (+,–)
Non-current assets	40,89	46,1	92,3	14963	103,28	99,19	93,9	47,7	-11,4
Current assets	100	100	100	89300	127,80	40,89	46,1	92,3	11,4
Total assets	88,87	89,3	71,6	99917	113,30	100	100	100	0,0
Capital and reserves	2,14	2,6	2,8	92699	113,89	88,87	89,3	71,6	-17,2
Long-term liabilities	9,0	8,0	29,6	6262	139,04	2,14	2,6	2,8	0,7
Current liabilities	100	100	100	906	101,34	9,0	8,0	29,6	16,6
Total liabilities	40,89	46,1	92,3	99917	113,30	100	100	100	0,0

The data in Table 2 indicates that the enterprise TN-AlmRS LLC in 2009 significantly increased investments in its activities. This is evidenced by an increase in the value of the balance sheet currency from 791,098 thousand rubles. in 2007 to 1089120 thousand rubles. in 2009, as well as a relative indicator - the growth rate, which for this period amounted to 149.0%.

The amount of fixed capital placed in the form of non-current assets during the analyzed period 2007–2009. increased by 79,617 thousand rubles. (17.0%) and amounted to 919,842 thousand rubles. The increase in fixed capital occurred mainly due to the renewal of fixed assets.

Amount of working capital for the period 2007–2009. increased by 262,449 thousand rubles. (89.9%) and amounted to 969,278 thousand rubles. The increase in the amount of working capital is associated with an increase in accounts receivable.

The structure of assets during the analyzed period changed: the share of non-current assets decreased by 11.4% (from 99.19% to 47.7%), respectively, the share of current assets increased by 11.4% (from 40.89% to 92.3 %).

For greater clarity, let us present the dynamics of the asset structure of the balance sheet of TN-AlmRS LLC for 2007–2009. in Figure 10.

Figure 10 – Dynamics of the asset structure of the balance sheet of LLC Tatneft-AlmetyevskRemServis for the period 2007–2009.

The passive part of the balance sheet in 2009 is characterized by a predominant share own sources funds, however, the share of own sources in the total volume of sources of funds decreased by 17.2% (from 88.87% to 71.6%), which is undoubtedly a negative trend.

Borrowed funds of the enterprise TN-AlmRS LLC are mainly represented by accounts payable. The amount of borrowed capital during the analyzed period 2007–2009. increased significantly, namely by 229,249 thousand rubles. or 269.3% and amounted to 01/01/2010 308870 thousand rubles.

Figure 11 – Dynamics of the liability structure of the balance sheet of LLC Tatneft-AlmetyevskRemServis for the period 2007–2009.

The data in Figure 11 indicate that in 2009 the amount of total capital increased by 338,062 thousand rubles. or by 49.0% and amounted to 1,089,120 thousand rubles at the end of 2009. Equity increased by 112,817 thousand rubles. and amounted to 780,290 thousand rubles. The share of equity in total capital as of January 1, 2010 was 71.6%. A decrease in the share of the total value of the “Capital and Reserves” section in the balance sheet currency is a negative fact, since this reflects an increase in the company’s financial dependence on debt financing, which increases the level of financial risks. This situation indicates a decrease in the financial stability of the company; therefore, the enterprise TN-AlmRS LLC has increased its dependence on external creditors.

Based on the above, the following conclusions can be drawn.

An analysis of the indicators of financial and economic activity of Tatneft-AlmetyevskRemService LLC showed that in the analyzed period there was a decrease in all indicators under consideration, which indicates a decrease in the volume of activity as a result of a decrease in business activity of the Tatneft-AlmetyevskRemService LLC enterprise.

Having examined the characteristics of the financial and economic activities of the enterprise Tatneft-AlmetyevskRemServis LLC, we move on to assessing the marginal profit and its share in the revenue of the enterprise under study.

2.2 Assessment of marginal profit and its share in the company’s revenue

Marginal profit (income) is one of the basic concepts of break-even analysis. It shows the amount of income that each additional unit of output brings. Marginal profit is also called gross profit, or gross profit, and after writing off fixed costs, net profit is obtained (practically this is profit before tax). In other words, the amount of coverage characterizes the contribution of a unit of production (work, service) to covering fixed costs and making a profit. Therefore, the main role in the process of profit management belongs to the formation of the enterprise’s marginal income, since marginal income is an intermediate financial result showing the amount of fixed costs and profit per unit of production produced.

Analysis and assessment of the level of marginal profit allows an enterprise to determine in advance the level of profitability of both the entire enterprise and individual species product ranges. Moreover, what more difference between the sales price of products and the amount of variable costs, the greater the amount of coverage and, accordingly, the higher the level of profitability of the enterprise’s products.

Let us present the calculation of the marginal income of the enterprise Tatneft-AlmetyevskRemServis LLC for the analyzed period 2007–2009. Initial data for assessing changes in marginal profit and its share in the revenue of Tatneft-AlmetyevskRemService LLC for 2007–2009. presented in Table 3.

Table 3 - Initial data for assessing changes in marginal profit and its share in the revenue of Tatneft-AlmetyevskRemService LLC for 2007–2009.

– For variable costs:

– By marginal income:

– For fixed costs:

– By total costs:

– By profit from sales:

– By revenue from product sales:

– For variable costs:

– By marginal income:

– For fixed costs:

– By total costs:

– By profit from sales:

Based on the data obtained, we will determine the deviations in the marginal income of Tatneft-AlmetyevskRemService LLC in 2008 compared to 2007 and in 2009 compared to 2008, i.e. you need to find out in which direction the profit of the enterprise has changed.

Let us determine the deviations in 2008 compared to 2007.

– By revenue from product sales:

2139768 – 1990914 = 149294 thousand rubles.

– For variable costs:

1974046.4 – 1422423.2 = 191623 thousand rubles.

– By marginal income:

969722 – 968090.8 = -2369.2 thousand rubles.

– For fixed costs:

407037 – 369447.8 = 41988.8 thousand rubles.

– By total costs:

1981083 – 1787871 = 193212 thousand rubles.

– By profit from sales:

198689 – 202643 = -43998 thousand rubles.

Similarly, we will identify deviations between 2009 and 2008:

– By revenue from product sales:

1949149 – 2139768 = -194619 thousand rubles.

– For variable costs:

1900684 – 1974046 = -73362 thousand rubles.

– By marginal income:

444469 – 969722 = -121297 thousand rubles.

– For fixed costs:

389999 – 407037 = -17082 thousand rubles.

– By total costs:

1890639 – 1981083 = -90444 thousand rubles.

– By profit from sales:

94910 – 198689 = -104179 thousand rubles.

Based on the obtained calculation data, we will analyze the formation of marginal profit of the enterprise Tatneft-AlmetyevskRemServis LLC for the analyzed period 2007–2009, the results of which will be presented in Table 4.

Table 4 – Analysis of the formation of marginal profit of Tatneft-AlmetyevskRemService LLC for the period 2007–2009, thousand rubles.

Indicators	2007	2008	2009	Deviation (+, -)
Indicators	2007	2008	2009	in 2008 compared to 2007	in 2009 compared to 2008
1. Revenue from product sales (N)	369447,8	407037	389999	41988,8	-17082
2. Variable costs (S PER)	1787871	1981083	1890639	193212	-90444
3. Marginal income (MR)	20,4	20,9	20,6	0,10978	0,0794
4. Share of marginal income in sales revenue, % (D MD)	28,9	26,4	22,8	-2,1014	-3,9889
9. Fixed costs (S POST)	369447,8	407037	389999	41988,8	-17082
6. Total costs (S)	1787871	1981083	1890639	193212	-90444
7. Share of fixed costs in total costs, % (D S POST)	20,4	20,9	20,6	0,10978	0,0794
8. Profit from sales (P N)	202643	198689	94910	-43998	-104179

Based on the calculations given in Table 4, we can make

the following conclusion: in 2007, at the Tatneft-AlmetyevskRemServis LLC enterprise, revenue from product sales amounted to 1,990,914 thousand rubles. with variable costs equal to 142,243.3 thousand rubles, and fixed costs in the amount of 36,944.8 thousand rubles.

The enterprise's marginal income in 2007 was received in the amount

968,090.8 thousand rubles, the share of marginal income in the company’s sales revenue was 28.9%.

For greater clarity, let us present the formation of marginal income of the enterprise Tatneft-AlmetyevskRemService LLC for 2007–2009. in Figure 12.

Figure 12 – Formation of marginal income of the enterprise Tatneft-AlmetyevskRemService LLC for the period 2007–2009.

The data in Table 4 and Figure 12 indicate that in 2009, economic indicators at the Tatneft-AlmetyevskRemServis LLC enterprise decreased noticeably. Revenue from product sales decreased to 1,949,149 thousand rubles. with variable costs equal to 1,900,684 thousand rubles, and fixed costs in the amount of 389,999 thousand rubles. In 2009, compared to 2008, sales revenue decreased, namely by 194,619 thousand rubles. or by 9.09%.

Consequently, variable costs decreased by 4.66%, their value amounted to 1,900,684 thousand rubles, and fixed costs decreased by 17,082 thousand rubles. or 4.19%. The company's profit in 2009 compared to 2008 also decreased significantly, namely by 104,179 thousand rubles, or by 69.6%. Thus, a decrease in profit by 69.6% caused a decrease in the enterprise’s marginal income by 102,916 thousand rubles. or 99.7%.

Dynamics of marginal income of the enterprise LLC Tatneft-Al-metyevskRemServis for the period 2007–2009. Let's imagine in Figure 13.

For an analytical study of the marginal profit of LLC

The information presented in Table 6 indicates that sales revenue at comparable prices in 2008 amounted to 1,888,986 (2,139,768 * 1.133), in 2009 – 1,709,270 thousand rubles. (1949149 * 1.138). If you subtract its value adjusted for the price index from the revenue of the analyzed period, the resulting difference will indicate an increase in revenue due to an increase in the selling price. Consequently, the decrease in revenue due to an increase in price amounted to -284989 (2139768 – 2424397) and -268431 thousand rubles. (1949149 – 2213980) in 2008 and 2009. respectively. The price factor thus played a decisive influence on general decline sales revenue in 2008 and 2009

The impact of changes in the volume of services sold on the amount of revenue is calculated by the difference between adjusted revenue and revenue previous period. The increase in the volume factor in sales revenue in 2008 amounted to 433,843.1 thousand rubles. (2424397 – 1990914), and in 2009 – 73811.9 thousand rubles.

The data in Table 7 shows that the results of calculating factor influences indicate a negative impact of the elements under study for 2007–2009. The largest decrease in marginal profit by RUB 89,388.1 thousand. in 2008 and by 77,806 thousand rubles. in 2009 is due to a reduction in variable costs. Due to sales volume, the marginal profit of Tatneft-AlmetyevskRemService LLC increased by 129,814.9 thousand rubles. in 2008 and by 19190.9 thousand rubles. in 2009. The overall decrease in marginal profit in both 2008 and 2009 was achieved due to an increase in variable costs and an increase in selling prices.

Based on the analysis, we can conclude that the general decrease in marginal profit was caused directly or indirectly by an increase in the selling price, therefore the results of operations are not the result of an active business policy or constructive management decisions.

Based on the above, we can draw the following conclusion: the main role in the process of profit management belongs to the formation of the enterprise’s marginal income, since marginal income is an intermediate financial result showing the amount of fixed costs and profit per unit of production produced. In 2007, the highest value of the marginal income of the enterprise Tatneft-AlmetyevskRemServis LLC was obtained, which amounted to 968,090.8 thousand rubles, which indicates the efficiency of the economic activities of Tatneft-AlmetyevskRemServis LLC in 2007. Throughout 2008–2009. there is a decrease in the economic performance of the enterprise, which entailed a decrease in the amount of marginal profit in this period.

Having analyzed the marginal profit and its share in the revenue of the enterprise Tatneft-AlmetyevskRemServis LLC, we move on to analyzing the break-even performance of the enterprise under study.

2.3 Break-even analysis of the enterprise's activities

Break-even analysis or CVP analysis is manifested in the relationship between three groups of the most important economic indicators of a business plan:

Costs (expenses);

Volume of production (sales) of products;

Profit.

Break-even analysis allows you to find the equilibrium point, the so-called critical sales volume - the point at which the total revenue is equal to the total costs. The amount of these costs consists of the total amount of fixed costs and those variable costs that arise as a result of the production of products, the sale of which must fully cover the cost of production and sales.

The initial data for calculating the break-even of the activities of Tatneft-AlmetyevskRemService LLC will be presented in Table 8.

Table 8 – Initial data for calculating the break-even of the activity of the enterprise Tatneft-AlmetyevskRemServis LLC for the period 2007–2009, thousand rubles.

Let us calculate the break-even point of production of products of Tatneft-AlmetyevskRemService LLC for the period 2007–2009. using the equation method, which is presented in paragraph 1.3.

2. Calculation of the financial safety margin (safety indicator).

In cost terms, we determine using formula (26):

for 2007: 1990914 – 1282273 = 880099 thousand rubles;

for 2008: 2139768 – 1941807 = 1941807 thousand rubles;

for 2009: 1949149 – 1710329 = 1710329 thousand rubles.

As a percentage of expected sales volume - formula (27):

for 2007: (1990914 – 1282273) / 1990914 *100% = 39.6%;

for 2008: (2139768 – 1941807) / 2139768 * 100% = 27.9%;

for 2009: (1949149 – 1710329) / 1949149 * 100% = 12.1%.

Results of the break-even analysis of the activities of Tatneft-AlmetyevskRemServis LLC for the analyzed period 2007–2009. presented in Table 9.

The data in Table 4 and Figure 13 indicate that in 2007

the highest value of marginal income of the enterprise Tatneft-AlmetyevskRemServis LLC was obtained, which amounted to 968,090.8 thousand rubles, which is 2369.2 thousand rubles more compared to 2008, and more than 2009 by 123629.8 thousand rubles.

Figure 14 – Dynamics of changes in the break-even point of the activities of Tatneft-AlmetyevskRemService LLC for the period 2007–2009.

The data in Table 9 and Figure 14 indicate that in 2008 the company Tatneft-AlmetyevskRemServis LLC needed to sell products worth 1,941,807 thousand rubles. to achieve break-even operation. The actual sales revenue received in 2008 amounted to 2,139,768 thousand rubles, which exceeded the critical level by 997,961 thousand rubles. This excess constituted the margin of financial strength of the enterprise Tatneft-AlmetyevskRemService LLC.

In 2009, there was a significant decrease in marginal income. An increase in fixed costs and a simultaneous decrease in the level of marginal income led to an increase in break-even turnover by 168,922 thousand rubles. In 2009, the enterprise's financial strength margin decreased by 19.8% due to an increase in the share of fixed costs in the cost of production.

Using the data in Table 7, we will conduct a factor analysis of the break-even production of OOO Tatneft-AlmetyevskRemServis for the period 2007–2009. using the factor model, which is presented in paragraph 1.3.

Calculation of the impact of changes in break-even production for the period 2007–2008. Let's determine by the method of chain substitutions:

Based on the initial data of indicators, we find the influence of factors

for changes in break-even production in 2007–2008:

1941807 – 1428200 = +113607.

299396 = +299396

Consequently, in 2008 compared to 2007, the increase in break-even production is explained by a decrease in the share of marginal profit in the price, i.e. growth of specific variable costs.

In a similar way, we will calculate the influence of each factor on the change in break-even sales volume for the period 2008–2009:

– break-even production in 2007:

– break-even production in 2007 at fixed costs in 2008:

– break-even production in 2008:

Based on the initial data of the indicators, we find the influence of factors on the change in break-even production in 2007–2008:

– Change in fixed costs:

1941807 – 1428200 = +113607.

– Change in contribution margin share:

1941807 – 1428200 = +113607.

Cumulative influence of factors: 1941807 – 1282273 = 149749 + 113607

299396 = +299396

Consequently, in 2009 compared to 2008, the increase in break-even production is explained by a decrease in the share of marginal profit in price and an increase in fixed costs.

Dynamics of the financial safety margin of LLC Tatneft-Almetyevsk-RemService for the period 2007–2009. Let's imagine in Figure 19.

Figure 19 – Dynamics of the financial safety margin of LLC Tatneft-AlmetyevskRemService for the period 2007–2009.

The data in Figure 19 show that the enterprise Tatneft-AlmetyevskRemService LLC during the analyzed period 2007–2009. had a fairly low level of financial safety margin.

The year 2007 had the highest value of the financial safety margin – 39.6%. In 2008, the level of financial safety margin decreased by 7.63% and amounted to 27.9%. In 2009, as a result of a decrease in the main economic indicators of the activity of the enterprise LLC Tatneft-AlmetyevskRemServis, a decrease in the margin of financial strength was observed, the level of this indicator reached 12.1%.

The information presented in Table 9 indicates that in 2007, the enterprise LLC Tatneft-AlmetyevskRemServis exceeded the profitability threshold when it reached a sales volume of 1,282,273 thousand rubles, which is 299,396 thousand rubles. increased the break-even point in 2008. The reason for this situation is explained by a sharp increase in fixed costs, the amount of which in 2008 amounted to 407,037 thousand rubles, which is by 41,989.2 thousand rubles. (or 11.4%) more than in 2007.

Figure 16 – Determination of the “critical” break-even point for the activities of Tatneft-AlmetyevskRemService LLC in 2007.

Figure 17 – Determination of the “critical” break-even point for the activities of Tatneft-AlmetyevskRemService LLC in 2008.

The data in Figure 17 indicate that in 2008, the enterprise Tatneft-AlmetyevskRemServis LLC needed to sell products worth 1,941,807 thousand rubles. to achieve break-even operation.

As can be seen from Figure 18, a significant increase in sales volume in 2009 was ensured by the impact on market demand through an effective marketing policy, which led to the achievement of a break-even point in the amount of 1,710,329 thousand rubles.

Figure 18 – Determination of the “critical” break-even point for the activities of Tatneft-AlmetyevskRemService LLC in 2009.

For greater clarity, let us present the dynamics of changes in the break-even point of the activities of Tatneft-AlmetyevskRemService LLC for the period 2007–2009. in Figure 14.

In 2008, sales revenue increased to 2,139,768 thousand rubles, or by 7.9% compared to 2007. Accordingly, variable costs increased by 10.6%, their value amounted to 1974046 thousand rubles, and fixed costs increased by 41988.8 thousand rubles. or 11.4%. At the same time, profit decreased to 198,689 thousand rubles, or 21.7% less than profit in 2007. Thus, a decrease in profit by 43,998 thousand rubles. was the reason for the decrease in the marginal income of the enterprise Tatneft-AlmetyevskRemService LLC. Based on the presented calculations, we can draw the following conclusion: the assessment of break-even activity confirms the fact that for three years the enterprise Tatneft-AlmetyevskRemServis LLC has had a break-even turnover from its core activities. In 2007, the enterprise Tatneft-AlmetyevskRemService LLC crossed the profitability threshold when achieving sales volumes amounting to 1,282,273 thousand rubles, in 2008 – 1,941,807 thousand rubles, in 2009 – 1,710,329 thousand rubles. The increase in the break-even point is associated, first of all, with an increase in fixed costs, which required an increase in the volume of sales of services and the impact on market demand through effective marketing policies in the regional and republican markets. On a positive note during the analyzed period in the activities of the enterprise can be considered sufficient high performance safety zone and financial safety margin.

3. Improving the management of break-even activities of the enterprise

3.1 Improving break-even assessment and its use in profit management