Costs and income of enterprises - Экономика и экономическая теория курсовая работа

Главная

Экономика и экономическая теория
Costs and income of enterprises

Resources of income for enterprises. Main ways of decreasing the costs Main ways of increasing the income. Any enterprise’s target is to make profit. In order to make it a company should understand where comes from the income and where goes out costs.


посмотреть текст работы


скачать работу можно здесь


полная информация о работе


весь список подобных работ


Нужна помощь с учёбой? Наши эксперты готовы помочь!
Нажимая на кнопку, вы соглашаетесь с
политикой обработки персональных данных

Студенты, аспиранты, молодые ученые, использующие базу знаний в своей учебе и работе, будут вам очень благодарны.
1 Economic essence of costs and income of enterprises
Resources of income for enterprises
2 Main ways of decreasing the costs Main ways of increasing the income
Any company or organization, regardless of ownership (private or public) in the implementation of its activities receives some income. The relevance of this topic is that in conditions of market relations incomes of enterprises and organizations have direct relevance to the budgetary system of the Republic of Kazakhstan.
The purpose of this paper is to explore the nature of income and costs.
The methodological basis was: Internet information sources, the book of domestic author.
Kazakhstan economy is market type of economy. Kazakhstan was the first country among CIS that received a status of country having market economy from the Ministry of Trade, USA. In 2000 this fact was confirmed also by European Union.
The economy started to change since 1991 after the collapse of Soviet Union. In 1990s many banks gave loans to people and organizations without knowing how to receive them back and according to what conditions it should be done. Today the situation is completely different: they know how to deal with loans business but there is no high demand especially after everybody felt the financial crisis and the crisis in construction sphere. Nowadays many enterprises pay special attention to the analysis of income and expenditure and their comprehensive characterization as many of the business people understood the importance of making, keeping and proper spending of money. Consideration of this issue is essential for the proper functioning of enterprises and organizations subordinated to the market laws. Right management decisions can be made only on the basis of clear understanding of income and costs question. Making the right decisions will lead the enterprise to financial independence and prosperity.
This paper gives information about resources of income, income allocation and types of costs in the section of “Economic essence of costs and income of enterprises”. It may be useful for entrepreneurs of small and medium enterprises, students of economic and financial departments of universities and colleges.
The problems of profit maximization and costs minimization are also considered in this paper. These topics are always very topical, because the main target of any enterprise is to maximize profit. How to do it? One of the ways is minimization of costs. Strive to minimize costs - not to act against the interests of business for avoiding costs. This should be solved by finding the best possible optimal ratio of revenues and expenses. The ways to minimize costs are given in the “Main ways of decreasing the costs” section.
Another topicality of this paper is the fact that income and costs (besides the financial results such as profit and expenditures) are the most important indexes of the enterprise's activity and main elements in the report about financial results. Financial results of the enterprise are found by comparing income and corresponded costs. That is why a proper understanding of income allocation and what types of costs there are, is crucial for the successful management of the enterprise.
1 Economic essence of costs and income of enterprises
Any enterprise's target is to make profit. In order to make it a company should understand where comes from the income and where goes out costs. Knowing the resources of income and types of costs will allow the enterprise to manage them successfully, which means it will be able to make profits. Companies and enterprises in different fields are part of whole economy. Active and profitable companies rise economic activity and contribute to the development of national economy. Big companies become bridges between countries and states.
Any enterprise has to have a system of accounting, managing and planning of costs and resources to finance its activities. Systems are constructed on the basis of income and costs.
Resources of income for enterprises
To define resources of income for enterprise all activities should be divided into:
- main and operational activities (production and selling products and services);
- financial activity (taking loans and giving them to other enterprises; enterprises' taking part in activities of other companies; operations of enterprise on the financial markets, differences in exchange rates etc);
- extraordinary items (operations that are not usual to activities of the enterprise).
This division of activities is very important as it allows to define what part of income was received from main activity, what part was received from other sources such as those that are unusual for a particular enterprise's activities and cannot be considered as some constant source of income.
So, in the system of financial management it is required to have following rates indexes:
a) net income from selling of products (providing services) - is gross revenue from sales minus value added tax, excise tax, returned products and price discounts. This index is the real base for further counting of profit index and evaluation of profitability;
b) gross profit from sales - net income from sales minus production expenditures of sold goods.
This index allows to analyze the effectiveness of production activity of the enterprise;
c) profit (loss) from main activity (operational profit or operational loss) - gross profit from sales minus management costs and sales costs. This index reflects the influence of management and sales costs to financial sales result;
d) profit from financial activity - balance of income and cost in hand by financial activity. This index is needed for defining the profit from production and economic operations including such sources of profit as receiving interest and dividends, operations with foreign currency etc.
e) profit from ordinary economic operations - sum of profits from main economic operations and profit from financial activity;
g) profit (loss) before taxes. This index is the point from which the accounting profit transmits into taxable profit.
Accounting (or reported) profit - is the profit, which was counted in accordance with requirements of book keeping. Main target is to define the accounting profit - to show the effectiveness of enterprise's activities for reported period.
Book keeping is made for gathering and analyzing information about income and costs of the enterprise and about net result of activities for making management decisions in future periods. After the target was achieved the result (profit before taxes) should be adjusted in accordance with tax law of the country. So, the taxable profit is accounting profit, that was recounted in accordance with tax law requirements;
h) net profit (net loss) - profit after taxes. In conditions of market economy it is the most important index of enterprise's activity. This index is always at the center of attention for managers and financial markets. The existence of the enterprise, working places for its employees, paying the dividends are depended on dynamics of net profit (http://www.telegra.ph/referat-68599.html).
The rights and opportunities of allocation and using of the income are very important for any enterprise because income is the main source of financial, production and social development, financial development of its employees.
The system of income allocation and utilization should stimulate further development of current particular type of business and expansion to new directions. It should also increase the interest for making more money
The order for income allocation and utilization for commercial enterprise are defined by the methodology of income that is accepted in particular society at this stage of its development
Current order of income allocation corresponds to current stage of market relations development, thus an enterprise should take part in forming the state budget. The rest part of the income should be allocated between owners and investors of the enterprise. If there were other financial resources the income should be allocated between them either in accordance with concluded agreements.
State influence on the choice of directions of net profits is made through taxes, tax exemptions, and economic sanctions.
Such system of income allocation began in 1964 in the Soviet Union. The system passed through three stages of development. The essence of the reform of income allocation is an ongoing decentralization of exemption of enterprise income in favor of the state and reduction of financing enterprises from the state budget. The current system of income distribution or allocation of domestic enterprises began to perform the same function as was adopted in developed countries in the West.
Thus, the transition to a market economy in Kazakhstan the system of income assigning focuses on the current overseas system.
Common to all businesses regardless of ownership and types of activity is the distribution of profits in accordance with the statute and the collective agreement for the following purposes:
2) contributions to the non-budgetary funds established by a decision of the Government or local authorities;
3) the formation of the accumulation fund;
4) establishment of a fund of consumption;
6) other purposes (saving for the purchase of property, etc.).
In Kazakhstan there are following taxes:
The list and the method of calculating taxes is subject to change by legislation.
Net income of the company after taxes and deductions (entrepreneurial income) is used to form:
Development Fund (accumulation fund), which corresponds to the growth of fixed and floating assets of the enterprise (capital gains);
Stock consumption (to increase the material interest of employees to improve efficiency and profitability of the enterprise);
Contingency fund designed to finance unforeseen costs associated with the risk of economic activity, other funds, if any founding documents, laws and requirements of practice.
The size of the funds is not strictly regulated, except for certain areas of their use.
Accumulation fund and the fund of consumption - a special purpose funds. They are formed, if foundation documents mention this. The accumulation fund is created to finance the production development of enterprises: financing of capital investments, expansion and reconstruction of enterprises, to finance new development, to pay off loans and interest thereon, for the maintenance of facilities for cultural and educational work and others. Thus, the accumulation fund is a source for entities, accumulating earnings and other sources to create a new property, the acquisition of fixed assets, working capital, etc. The accumulation fund indicates a growing wealth of the company, extending its own funds.
Consumption fund - the source of funds that were saved for implementation of social development (excluding capital expenditures) and financial incentives for personnel. The consumption fund is directed to the following objectives:
- the payment of lump-sum compensation for work results at the end of the year;
- to establish entitlements to pensions of working pensioners;
- one-time incentives for employees;
- establishment of labor and social benefits;
- the payment of dividends on securities.
Reserve fund is created by an enterprise in case of termination of its activities to cover accounts payable. It is mandatory for joint stock companies, cooperatives, associations, enterprises with foreign investment. The company in addition to the reserve fund shall transfer the share premium, ie, the amount of the difference between the sale and the nominal value of shares, the proceeds of their implementation at a price higher than face value. This amount is not subject to the use and distribution, except the cases when shares are sold at a price below face value.
Contingency fund of joint stock company is used to pay interest on bonds, dividends on preferred shares, in case of insufficient net income for these purposes.
Planning the distribution of profits is carried out in two stages:
On the first the need of profit is determined by the following directions of its use:
a) to finance the development of material and technical base - the advance of capital. The need for profit in this area is determined on the basis of expert evaluation of requirements for equipment modernization, taking into account other sources of funding
b) to finance the growth of own revolving funds - advancing its own working capital. Calculation of the need for additional working capital may be made by technical and economic calculations or by direct calculation on the basis of data on the availability of working capital at the beginning of the planning period, projected growth rates of turnover, taking into account changes in the participation of its own funds to pay for goods and trade in shares credited to total value.
c) for the establishment of financial reserves. The need for financial reserves is defined in two ways: either as a percentage of net profit specified in the constituent documents, or on the basis of financial need due to growth and expansion of business activity.
d) for repayment of long-term and medium-term bank loans and paying interest on them. The need for these resources is determined by the contract and terms of obtaining and repayment of these loans;
e) to pay off other types of credit obligations of the enterprise (bonds) and interest payments on them;
f) use the profit for the acquisition of credit obligations, shares of other companies is mainly determined by an expert selected by the light of targets in the development of the enterprise (flow of capital into other forms of economy, market expansion, etc.);
g) for financing of unions, associations, corporations and other horizontal structures, which is a member of the enterprise. The need for profits for these purposes is determined by the contract and the charter of all these structures, either as a percentage of profits or volume of goods turnover, either in absolute amount;
h) for social enterprise development and improving material incentives, taking into account the needs of social, cultural, housing events and its cost. Increase of material incentives is possible by adopting the principle of participation in profits;
i) to ensure compliance with tax obligations to the state;
j) to pay dividends (if such costs are mentioned in the foundation documents). The economic basis for this payment of dividends on stocks and bonds, except shares of a joint stock company, according to many experts, is that owners play roles of creditors of the of the enterprise and should receive a portion of profits as dividends, which corresponds to the cost of debt capital on the markets of production factors (the lower limit ) or equal to the additional profits earned by the enterprise-borrower from the use of additional capital in the planning period in proportion to the share capital in the total amount of the funds (upper limit).
The second step compares the amount of demand for income in all areas of its use with a capacity of enterprises to receive it.
Total demand for profits by the above mentioned directions of its use is one of the variants of the value of the target company's profit.
Final decisions on the planned uses of profits made after the profit plan taking into account the potential to receive it.
Each company produces an annual plan and budget estimates of the actual use of the accumulation fund and the consumption fund. Each of these estimates show balance the flow of funds in the financial year, expenditure on specific areas, the balance at the beginning of a future period. The actual performance of the estimates is analyzed with planned developments.
Retained earnings of previous years may be directed towards replenishment of the reserve fund, to increase the authorized capital, to increase funds for special purposes (to purchase the property, etc.) (http://www.xserver.ru/user/pkpri/5.shtml).
Production of any commodity is a cost of economic resources - raw materials, fuel, energy, labor, transportation and other services. Payment for all of these resources represents a cost of production. Due to the fact that not all of these resources are actually paid, that is, some of which the company can use as a free, economists distinguish between explicit and implicit costs.
Explicit costs (external accounting) - a cash payment for the resources obtained from (wages, payment for the supply of raw materials, transportation, legal, consulting and other services).
Implicit (internal) costs - are costs associated with the use of enterprise's own resources. In contrast to the explicit, these costs are not paid, are not reflected in financial statements, they are hidden, ie, they are firm's own resources used in its manufacture. The magnitude of these costs is determined by income, which could bring these resources in their most profitable alternative use. The existence of implicit costs can be illustrated by the activities of the firm or enterprise, which uses owned and rented production facilities, equipment, machines. The company pays for the use of foreign capital rent, which includes interest and depreciation. Since the alternative use of company-owned capital, such as giving it for rent, would have brought in revenue as interest, then the firm must take into account the cost of using own capital. They represent the interest on capital.
There is another point from which costs may be considered. Part of used economic resources may be owned by a firm, owned by their respective owners. Another part of the resources the firm acquires from suppliers who are not owners of the firm. Thus, firm may have production facilities and equipment, vehicles, etc. At the same time, the company buys raw materials, fuel, energy, labor services, etc. Using any resource entails costs. Costs for use of own land is called rent, or internal rent, the costs of using entrepreneurial skills of company owner are called the normal profit, costs for use of company-owned industrial buildings, equipment and other items of real capital is called interest.
Thus, economists include into the economic costs of production all costs - internal and external, including rent into internal costs, normal profit and interest in order to attract and use resources in the competitive enterprise. Accounting costs are equal to the total external costs. From these definitions it follows that the economic costs are bigger than accounting costs for the amount of internal costs of the firm.
Accounting department registers production costs. The accountant records the actual costs that have occurred in the last period, determines the actual total costs in cash. If the production costs include only explicit costs, then their sum can be understated, and the difference between the proceeds from sales and explicit costs will be overstated.
Sunk costs (may be also referred as Fixed costs). There are also so-called sunk costs, which the company has spent, but won't be able to recover. Sunk costs do not influence the firm's decision-making on actions in future. But we can estimate the previous decisions that led to the emergence of sunk costs.
The volume of total cost of firm varies depending on the output Q. If the output increases, then total costs increase also. If production reduces, company's costs also reduce.
The amount of some types of costs remains constant, independent of production volume. Fee for leased space, equipment, other costs remain constant, no matter how varies the production volume. The firm's costs, the amount of which does not depend on the volume of output, called the fixed costs (FC).
At the same time, the costs of materials, fuel, energy, salaries and other change along with the output. If the production output stops, then such costs reduce almost to zero. With the growth of production variable costs increase, while the total value of fixed costs remains unchanged. Costs of production, the magnitude of which depends on the volume of output, called the variable (VC) cost of the firm. Total (TC), or gross, the cost to the company equal to the sum of fixed and variable costs: TC = FC + VC. Fig. 1 shows the line of fixed costs, variable costs and total costs curves. These forms of curves have most of the firms.
Fig. 1. Constant, variable and total costs of firm
Costs that don't change over a period of time and don't vary with output. E.g. salaries, rent, tax, insurance, heating and lighting. Fixed costs can also be called indirect costs as they are not directly associated with the final product. Fixed costs have to be paid even if the company is not producing any goods.
Costs that vary directly with output so when output increases, variable costs also increase. E.g. raw materials, electricity. Variable costs can also be called direct costs as they are directly associated with production.
These costs have fixed and variable elements. E.g. a person working for the company may have a fixed salary but may also earn commission on sales.
Total costs are calculated by adding together fixed, variable and semi-variable costs.
2 Main ways of decreasing the costs
Production costs depend on the effective use of economic resources and are determined by the cost of unit of production.
In order to minimize costs, the company shall take the following action:
* what is the best way to organize the production of existing production facilities
* which new production capacities to choose taking into account scientific and technological progress;
* what is the best way to adapt to discoveries and inventions.
Correct solution of these problems should lead to profits.
Fig. 2 Graph showing the number of products in the function of minimum production costs
Isocost - is a graphic representation of the production function with a straight line, which shows all the combinations of factors of production, the use of which requires the same cost.
Q = B * (K * L) - firm's production function in the long run.
The curve of Q determines the volume of production, in which the enterprise should carry minimal level of costs.
Company can not select C0 isocost, as there is no such combination of factors that would provide the output Q when their value is equal to C0. Given volume of production can be achieved at a cost of C2, where the cost of capital and labor are, respectively: K2L2 at point A and K3L3 at point B, but in this case the costs will be minimal, so the chart shows that the most effective solution - the point N ( K1L1), which ensures minimization of production costs. Since prices on the factors of production change, C1 changes its slope to C3. Since the speed of capital increases, the best option would be the point M (K4L4), which ensures minimization of costs.
The equilibrium is determined by the terms of achieving maximization of profits. To achieve this, the firm must use variable resources in such quantities, that ratio of norms of technological substitution of one resource to another, equal to the ratio of prices of these resources.
Constant effect of production scale growth is characterized by the fact that the volume of production increases in the same proportion as the cost of resources.
Negative effect of production scale growth is characterized by the fact that the output increases less than the cost of resources.
Positive effect of production scale is characterized by the fact that the volume of production increases in the proportion that exceeds the proportion of the increased costs of resources.
Main directions of reducing the costs of production:
1. The use of scientific and technological progress;
2. Improving the organization of production on the basis of productivity increase through reduction of working time wastes;
3. State regulation of economic processes (http://zubolom.ru/lectures/economy/28.shtml)
There is another essence of costs decreasing. Costs can be decreased if in the company was created the system of effective control over costs. Such system involves classification of costs, depending on how easily they can be adjusted using the alternative solutions, and consists of the following elements:
Sometimes you can reduce costs by simply starting counting them systematically. It was noticed, for example, that when the company begins to record outgoing long distance and international calls to their staff on the date, time and purpose, the total number of calls is reduced due to a decrease of personal calls.
Staff's support of cost accounting system.
Employees should be attracted to follow the cost accounting system. If there is a strong staff resistance to change cost accounting system the leader should explain the need to reduce costs, make staff understand that their proposals regarding savings are of high importance and will be valued in future (maybe financially).
Analysis of the causes of costs in the company.
Such analysis allows to take the necessary steps immediately to eliminate the causes of an undesirable increase in cost. Thus, if the entertainment expenditures rise, it is useful to determine why employees are spending company's money in expensive restaurants. Company actively expands its clients base and the number of signed contracts grows? Or because the control over the entertainment expenditures became weak?
Tips to reduce costs could be as follows:
1. Categorization of expenses by clearly defined categories. For example, the cost of raw materials, labor, all direct production and general business
2. Focusing on the most significant costs, determine which of them should be adjusted.
3. Planning and implementation of cost reduction.
This is general recommendation, the applicability of which is listed in the table. 1 (asterisks shows the relevance of activities from the list for those or other costs)
1. Know the measure. Do not spend more than necessary to your business now.
2. New or old partners. Try to negotiate more favorable terms with suppliers, contractors and other partners with whom you have worked before the crisis. If it is not possible to agree with old partners, find new partners, which may offer more favorable terms for you.
3. Horizontal integration. Develop horizontal integration, which involves joint purchases together with other buyer from one supplier. For example, two commercial companies can join to get discounts for large volume purchases.
4. Vertical integration. Develop vertical integration, which involves the development of close relationships with suppliers to control and possibly reduce the cost of materials and services.
5. To buy or produce. Check what components (materials, raw materials, etc.) your company may produce, and which are cheaper to purchase from other manufacturers.
6. Rent or own. Check what is cheaper: to rent a room (equipment, etc.) or buy it to use on the rights of the owner.
7. Forms of payment. Look for new payment options.
8. Tighter control. Simply create better control: consider the costs and they will be less.
9. Optimization of technological processes. Check whether it is possible to achieve savings through improved technological processes and work organization, for example, spending less raw materials per unit of output.
Activities or items that incur costs
Total economic costs (accounting, purchasing department, sales, training, etc.)
Fig. 3 Table of activities and items that incur costs
(http://vuzlib.net/beta3/html/1/5575/5639/)
3 Main ways of increasing the income
Directed to production at lowest costs, the firm typically sees the problem not as a whole target but as means of solving much more general problem - the maximization of profit. This is the main goal for any company, even if it is not formulated as a leading motive for its activities.
In some cases, firms can aim not at maximizing profits, but other tasks, such as increased sales, achieving social recognition and for implementation of those tasks it sacrifices some part of its profits. Such motivation of firm's behavior is called satisfactory behavior. However, even in this case one is in need of maximizing profits, at least in the long run, because only the desire for profit will rationally allocate resources, ensure high efficiency and, consequently, will allow successful implementation of the selected goal.
Profit maximization for the firm means finding ways to obtain maximum economic profit, thus the difference between total income and overall costs.
TR - total revenue, defined as the product of the number of goods sold by its price;
TC - total costs, including both direct and indirect.
If the production and sales will be increased, then at constant prices the total revenue and total costs will increase: revenue - due to increased amount of goods sold, cost - due to the law of diminishing returns. Profits will occur as long as income growth will exceed the increase in costs, and its size will depend on the ratio of these quantities. Therefore, to solve the problem of profit maximization, it is important to consider not common, but limit values of the indices considered.
The amount added to the total revenue from each additional unit of output, would be a marginal revenue. And marginal costs are those costs that are added to the total costs with each unit of output.
As long as marginal revenue exceeds marginal cost, the firm makes a profit and, hence, it makes sense to increase output. But when the increase in income from the last unit of output equals the growth in production costs of this unit, the growth of production should be halted, because the increment to profits will be zero.
It is possible to formulate a general rule of profit maximization: The firm will increase output until the
Costs and income of enterprises курсовая работа. Экономика и экономическая теория.
Конкурсы Сочинений 2022 2022
Магистерская диссертация по теме Исследование механизмов построения интегрированной инструментальной среды на базе КОМПАС-3D
Контрольная работа: Основы правового статуса человека и гражданина Гражданство. Скачать бесплатно и без регистрации
Робот Моей Мечты Сочинение
Практическая Работа Решение Уравнений
Пособие по теме Симетричні нерозгалужені трифазні кола синусоїдного струму
Практическое задание по теме Разработка информационной системы предприятия с помощью системы управления базами данных Access 2007
Курсовая Работа На Тему Сущность И Функции Налогообложения
Реферат по теме Социальное призрение детей в России
Реферат по теме Исследование издержек предприятия
Реферат: САПР мебели из модульных конструкций. Скачать бесплатно и без регистрации
Контрольная работа по теме Имитационное моделирование в педагогике
Сочинение Для Хора 7 Букв
Эта Красота Окружала Меня С Детства Сочинение
Сколько Пишут Курсовую Работу
Реферат Современное Российское Общество
Сочинение По Рисунку Летом
Контрольная работа: Значение игры для психического развития ребенка
Курсовая работа по теме Хранение и учет архивных документов
Курсовая работа по теме Фазовий розмірний ефект
Бухгалтерский учет основных средств - Бухгалтерский учет и аудит курсовая работа
Негосударственная служба - Государство и право реферат
Лексика английского языка - Иностранные языки и языкознание контрольная работа