Profit by line of business
Operating leverage: what happens to profit margins if revenues fall. And if it grows up?
Usually business owners are interested in two interrelated indicators: revenue and profit. Revenue shows how much the company earned, and profit shows how much is left after deducting expenses. Most…

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How to get through the off-season without cash gaps
In the spring and summer, the company had strong sales, and in late autumn, winter and early spring it had to take out loans and overdrafts. They figured out how…

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The first rule of building a group of companies without signs of artificial fragmentation
Let's remember what we know about business processes? They have a beginning and an end, that is, they have boundaries in time. There is an “exit”, to which a unique…

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Preferential loans for legal entities and individual entrepreneurs
The state provides loans to businesses for resuming operations and for expenses related to the borrower's business activities. The funds issued are not earmarked; they can be used not only…

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7 financial risks in business that can be worth millions
There are always risks in business, and there are many of them. Some cannot be influenced, for example, if the summer in the region turned out to be dry, agribusiness…

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necessary to subtract

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Direct and indirect costs or why it is impossible to count net profit by line of business

In companies with several divisions and branches, it is difficult to calculate the profit of each. You can subtract all expenses from all income and get some value. But this approach is not entirely correct. Rather, it would be to understand the direct and indirect costs, calculate the gross profit and only in this way determine the efficiency of the business.

Why exactly and what all these parameters mean – we will consider in this article. Continue reading →

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Building material for the Group of Companies
Medium business cannot successfully exist within a single legal entity. A group of subjects is always required, otherwise it is impossible to resolve individual issues of property, management and other…

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Let's break it down into ions: writing off perishable food
The life cycle of a perishable can be from several hours to several years, but the shorter it is, the higher the risk of write-offs, so management must be clearly…

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Preferential loans for legal entities and individual entrepreneurs
The state provides loans to businesses for resuming operations and for expenses related to the borrower's business activities. The funds issued are not earmarked; they can be used not only…

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