The first of the material indicators is profit. It shows how efficient the enterprise's production is, i.e. it reflects the quality, volume and speed of production, as well as its cost price. When calculating profit, the income received and the costs of production and sale of goods are taken into account.
The second indicator is NCF. This is the sum of the company's existing positive and negative cash flows. If this indicator is above zero, the company is solvent. The difference between this parameter and the previous one (profit) is that in addition to net income for a certain period of time, it also takes into account settlements on debts - accounts payable and accounts receivable.
In other words, profit is the money ios database that a company has at its disposal in a specific period of time, and cash flow is what the company will have if all existing debts are repaid, both its own in relation to others and those that counterparties return to it.
Financial group of BSC indicators
Next, we consider two such indicators as profitability of production and capital. These are parameters that reflect the efficiency of production costs or assets, which are expressed as a percentage. Profitability as an abstract concept is the ratio of the profit received to the expenses incurred. If the term refers to products, then this is the figure of dividing the profit from sales by the cost price, and when speaking about the profitability of capital, we mean a fraction with net profit in the numerator and the amount of invested funds in the denominator.
And finally, the cost price of the product. This parameter was mentioned when analyzing the previous ones. The indicator consists of the cost estimate of the costs and expenses for the production of the given product. There is a shop cost (shows direct and general production costs for manufacturing), production cost (includes shop cost plus general business costs) and full cost. The last type is the sum of the production cost price and commercial and sales costs, that is, it includes the costs of both the creation and sale of the manufactured product.
Case: VT-metall
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