Basic economic concepts and indicators of enterprise activity. Economic indicators. Economic analysis Types of economic indicators

An enterprise as an economic entity has a complex and multi-level architecture, which includes a significant number of divisions and departments. Thus, in addition to production departments, the structure of an enterprise may include administrative, financial, marketing, research and other types of divisions. Each of these divisions carries out its functions within the competencies and boundaries defined for them in the structure of the enterprise. Taken together, they are all part of a single organizational and economic mechanism that creates products. The activity of this mechanism has its own patterns and established terminology.

The terminology used by economists when naming certain concepts and functions in the economic sphere of an enterprise allows them to significantly simplify the processes of cooperation and interaction when managing these functions. Like any professional environment, enterprise economics needs this terminology insofar as the use of specialized terms also simplifies the process of solving specific problems within the enterprise, as well as the processes of modeling and presenting various problem situations.

One of the basic categories in the economics of an enterprise is the structure enterprise capital. Its total capital is divided into equity and debt. TO equity refers to that part of the property, financial and material resources of the enterprise that legally fully belongs to this structure and can be used by it at will, taking into account the interests of the organization and its employees. TO borrowed capital, in turn, includes that part of the funds that is attracted by the enterprise within the framework of various credit schemes and loans: borrowed financial resources, equipment for leasing, etc. The use of this part of the enterprise’s funds, as a rule, is not completely free and has certain target limits agreed upon with creditors or lessors. These conditions are described in an agreement or contract, where the company undertakes to comply with them in full, and in case of violation of the rules for the use of borrowed capital, various penalties may be applied.

The second important gradation of an enterprise’s capital is its division according to the principle of fixed and working capital (Fig. 2.2).

Rice. 2.2.

The presented diagram reflects the capital structure of the enterprise from the position of its use in the economic cycle, according to which it is divided into non-negotiable And working capital. Non-current capital is understood as that property that operates for a period exceeding one cycle (turnover) of production, namely:

• building;
• structures;
• equipment and power machines;
• working machines;
• computer technology and high-tech equipment;
• vehicles various types (forklifts, cars and trucks) automobile transport, electric cars, etc.);
• other equipment and machinery.

All of the listed types of property and equipment have a long service life and wear out gradually, transferring their value to the cost of production by depreciation. Under working capital refers to those funds and property of the enterprise that are fully used within one production cycle (turnover), transferring their value to the cost of production in full. The working capital of an enterprise includes two main groups: circulation funds And working production assets. Circulation funds include:

• cash in the cash register of the enterprise and in bank accounts;
• finished products shipped to the customer and not paid for;
• finished products in the enterprise warehouse;
• accounts receivable.

Working production assets include:

• materials, raw materials, semi-finished products;
• fuel;
• spare parts and parts;
• small production tools with a short service life;
• unfinished production;
• Future expenses.

From the given lists of elements included in the circulation funds and circulating production assets, one can see that these two subsystems complement each other in the dynamics of the production process. Circulation funds in this sense represent those internal sources of financing of the enterprise that it already has or will appear in the foreseeable future (in the case of accounts receivable). At the same time, both subsystems function interconnectedly, providing the production process with the necessary material and financial resources.

Next, we should consider such basic economic categories that are often encountered in the process of managing the activities of an enterprise, such as income Andexpenses. According to the definition accepted in the economic environment, under income refers to an increase in economic benefits for an enterprise due to the influx of new assets and repayment of obligations from counterparties, contributing to the growth of the enterprise’s capital. It should be noted that the income of an enterprise does not include contributions from its founders and participants, as well as funds received in the form of a deposit, an advance, under agency agreements, as well as repayment of a loan to the enterprise. In accounting, income is divided into two groups:

• income from ordinary activities – revenue from the core activities of the enterprise (sales of finished products, provision of core services);
• Other income – a group of enterprise income, including penalties, penalties, fines, proceeds to compensate for losses caused to the enterprise; profit of previous years identified in the reporting year; positive exchange rate differences; amounts accounts payable for which the statute of limitations has expired; profit from joint work with another organization; proceeds from the transfer of rights to use patents, as well as rights to use the assets of the enterprise; the totality of the enterprise's income that was received as a result of emergency circumstances (fire, natural Disasters, man-made disasters): compensation for material losses from the state, insurance compensation, the cost of valuables remaining after the write-off of unusable assets, etc.

The second basic category of an enterprise's economy is its expenses. Under expenses of an enterprise is understood as a decrease in its economic benefits in the process of outflow of assets (financial and material resources) and/or the emergence of liabilities, which leads to a decrease in the level of capital of the enterprise (excluding a decrease in deposits by decision of the owners of the enterprise). Expenses include the same two groups:

• expenses for ordinary activities – costs for the manufacture of products or the provision of services that are the core activity of the enterprise (in particular, the costs of raw materials, supplies, as well as the organization and support of the production process);
• other expenses – expenses of the enterprise, including penalties, penalties, fines, proceeds to compensate for losses caused by the enterprise (for example, the environment); losses from previous years; amounts accounts receivable for which the statute of limitations has expired; expenses associated with the provision of enterprise assets for use for a fee; from joint work with another organization, etc.

For tax purposes, income is divided into sales income And non-operating income, and expenses - for costs associated with production and sales, And non-operating expenses. The essence of these economic categories is clear from their names.

One of the key indicators reflecting the degree of profitability of an enterprise is profitability. Under profitability of the enterprise is understood as a value reflecting the efficiency of use of enterprise funds and representing the ratio of profit to average cost fixed and current assets. In addition to enterprise valuation, profitability as an economic category covers quite a lot of areas, forming the following indicators:

• product profitability;
• profitability of fixed assets;
• profitability of sales;
• personnel profitability;
• return on assets;
• return on equity;
• return on invested, permanent capital, etc.

When assessing the efficiency of an enterprise and its business processes, profitability analysis is one of the most common methods due to its high accuracy and ease of practical use.

Next we should consider the concept depreciation, also being a very important category in the field of enterprise economics. Under depreciation refers to the gradual transfer of the value of fixed production assets to created products through systematic depreciation charges in order to accumulate funds at the enterprise for their subsequent renewal. Any equipment, buildings, structures, computer technology - all these assets are subject to gradual wear and tear due to the influence of the time factor and their constant use in the production process. Excessive wear and tear of fixed assets leads to a partial or complete inability of the enterprise to maintain the same volume of production, quality of products, introduce innovations, etc. With the accumulation of experience in the functioning of enterprises in the economic environment, based on observations and analysis of statistical data, universal indicators (coefficients) were developed - depreciation rates for various types of equipment, buildings, electric motors, etc. Examples of some coefficients are given in table. 2.1.

Table 2.1

Depreciation rates by type of fixed assets of the enterprise (as a percentage of the book value of assets)

Based on the data given in the table, we can, for example, determine that it will take 20 years to completely wear out a manually operated machine, and just over 14 years to completely wear out a CNC machine. Such standard values ​​allow the enterprise not to conduct its own research on equipment wear, but to immediately include these values ​​in the cost of production. There is also the practice of accelerated depreciation of equipment, which involves increasing the depreciation rate in order to more quickly transfer the cost of equipment to products. Accelerated depreciation is used in cases where high-tech equipment and computer equipment are worn out. The economic meaning of this measure lies in the enterprise’s desire to more frequently update high-tech equipment in order to maintain a sufficiently high computing and innovative potential of the enterprise.

The process of economic cognition goes through a number of stages. At the first stage, facts and events of real life are analyzed; on the second, theoretical principles and principles are developed; at the third stage, decisions are made and economic policy is developed. Cognitive methods are needed in order to understand economic categories and discover economic laws.

Economic category is a concept that reflects the most essential properties of economic phenomena, their relationship to each other. Examples of such categories are goods, property, cost, supply and demand curve, profit, etc., the knowledge of which already presupposes scientific knowledge.

Economic law– is an expression of significant, constantly recurring cause-and-effect relationships between economic phenomena in the system of economic relations.

There are two groups of economic laws. The first group consists of objective economic laws that have been in force throughout the history of human development: the law of value, the law of increasing labor productivity, the law of diminishing returns, the law of demand, the law of supply, etc.

The law of value, for example, objectively requires that products be sold at a cost in accordance with the socially necessary labor expended on their production. But in real life, people deal not with value itself, but with the form of its manifestation - price. Price is an objective economic category, a form of practical use of the law of value. Hence the need arises to master the pricing mechanism and use prices in regulating the economy. The situation is similar with the use of other economic laws. For example, the law of growth of labor productivity requires that labor productivity grow faster than the growth wages. Its violation will lead to a disruption in money circulation, the appearance of so-called “extra money” in circulation, which creates a shortage of many types of products and other negative phenomena. The law of dependence between demand and price (law of demand) characterizes the change in the price of a product when the demand for it changes (with unchanged quality). With a decrease in the price of a product, demand for it increases, and with an increase in price, on the contrary, it decreases. The law of dependence between supply and price (law of supply) characterizes the change in the price of a product when its supply on the market changes. The law of competition is a law in accordance with which an objective process of constant improvement of product quality and reduction of its unit price takes place in the world.

The second group includes legal laws regulating the activities of the mechanism of economic relations. These include laws: on business companies, on taxation, on antimonopoly policy, etc. The role of the state is to develop legislative framework and ensure control over its compliance. This situation does not interfere with the independence of economic decisions and their implementation in a specific organization.

Economic indicator characterizes the state of the economy, its objects and processes occurring in it in the past, present and in the future. It includes name, numerical value and unit of measurement. So, if the indicator “profit from sales of products PR = 150 million rubles,” then “profit from sales of products” is the name of the indicator, “150” is a numerical value, and “million rubles” - unit of measurement. Thanks to this combination, economic indicators combine verbal and numerical descriptions of objects and phenomena, which makes such indicators a universal means of the language of economics.

Economic indicators are divided into groups according to a number of characteristics. In accordance with the division of economic science into macro- and microeconomics, it is customary to distinguish generalized macro economic indicators characterizing the economy as a whole, and microeconomic indicators related mainly to organizations (enterprises).

In the structure of economic indicators, a distinction is made between absolute and relative.

Absolute characterize volumetric indicators, which are divided into natural and cost. Natural indicators are expressed in physical measurements (in units of mass, in pieces). Cost indicators are expressed in monetary units, i.e. rubles, euros, dollars, etc.

Relative indicators represent the ratio of two indicators of the same or different dimensions. In the first case, these are dimensionless indicators that characterize the ratio of homogeneous economic quantities. In the second case, these are dimensional indicators characterizing the use of economic resources. For example, an indicator of labor productivity is the number of products produced per worker.

When considering relative economic indicators, a distinction is made between growth and increment indicators. Growth indicators represent the ratio of the amount of products produced or consumed in a given period to a similar indicator in the previous period. Growth indicators are often called indices in statistics. The index represents the ratio of the indicator at a given moment to its base value. Indices of prices, incomes, etc. are widely used.

Growth rates represent the ratio of the increment (increase or decrease) in the amount of a produced, sold, consumed product in a given period to the amount of the same indicator in the previous, base period. Incremental indicators, like growth indicators, are measured in shares or percentage terms. They are considered for monthly, quarterly and annual periods.

E economic indicator- shows and characterizes the state of the economy, its objects, processes occurring in it in the past, present and in the future. Economic indicators represent one of the most common and effective tools for describing the economy, used in economic science and in the management of economic processes.

In its most general form, an economic indicator includes a name, a numerical value and a unit of measurement.

The composition and structure of economic indicators represent one of the significant objects of study of economic science and, at the same time, its substantive element.

System of economic indicators— a set of interrelated, systematized indicators characterizing the economy as a whole, its industry, region, sphere of economic activity, and a group of homogeneous economic processes.

EP grouping

The structure of economic indicators is very ramified; indicators are divided into groups according to a number of characteristics.

In accordance with the division of economic science into macroeconomics and microeconomics, it is customary to distinguish generalized macroeconomic indicators, characterizing the economy as a whole and its large parts, spheres, and microeconomic indicators, relating mainly to the economics of companies, corporations, enterprises, firms.

In the structure of economic indicators there are absolute, also called quantitative, voluminous, and relative, also called quality. Absolute, volumetric indicators (in economics as opposed to physics voluminous are any indicators characterizing the quantity of goods, products, money) expressed in natural or monetary units, such as pieces, weight, length, volume, rubles, dollars. Relative indicators represent the ratio of two indicators of the same or different dimensions. In the first case, these are dimensionless indicators that usually characterize rate of change economic value or ratios, proportions of homogeneous economic quantities obtained as a result of their comparison, measured in fractional terms or as a percentage. In the second case, these are dimensional indicators that characterize the rate of change of a value over time, the efficiency of resource use, and the sensitivity of a value in relation to the factor that determined its change. For example, the performance indicator car engine can be measured by the mass of gasoline consumed per kilometer of travel, and the return on investment indicator can be measured by the number of products produced per ruble of capital investment.

In the aggregate of relative economic indicators that characterize the dynamics of economic processes and changes in volumetric indicators, a distinction is made between indicators of growth (growth rate) and growth (incremental).

Growth indicators(growth rates) represent the ratio of the amount of an economic product produced or consumed in a given period to the amount produced or consumed in the previous period. Most often, annual, quarterly, monthly periods or simply fixed end and start dates are considered. If during the studied period of time the volume of the product has not changed, then the growth rate (growth rate) is equal to one or 100%; if the volume has increased, then the growth rate exceeds 100%, and if it has decreased, then it is below 100%.

Growth indicators characterize changes in the state of the economy, and therefore they can also be called indicators of the state or change of the economy. A group of such relative indicators often used in statistics is formed by index indicators or simply indexes. The index represents the ratio of the indicator at a given moment of interest to its basic value, recorded at the corresponding time, taken as the basis. Indices characterize the relative value of the indicator in comparison with the starting, base and thereby show how the value of the indicator has changed over a certain period of time (from the base to the current). Indices of prices, incomes, and living standards are widely used.

Growth rates or incremental indicators, represent the ratio of the increment (increase or decrease) in the amount of produced, sold, consumed product in a given period to the amount of produced, sold, consumed product in the previous base period. If during the studied period of time, say, for Last year the volume of production has not changed, then the growth rate for this year is zero; if the volume has increased, then the growth rate is positive; if it has decreased, then the growth rate is negative. Incremental indicators, by analogy with growth indicators, are measured in shares or percentage terms. Based on physical analogies, growth rates can be called indicators of “economic acceleration”.

Economic indicators are divided into a number of groups depending on how they are defined, how their numerical values ​​are found and for what purposes, to solve what problems the indicators are used.

Values calculation, calculation and analytical indicators are established through calculations based on mathematical dependencies, economic and mathematical models using certain methods. Calculation and analytical indicators are widely used as initial ones in determining forecast And planned indicators, as well as indicators of socio-economic programs.

The values ​​of reporting, reporting and statistical indicators are established on the basis of the financial statements of enterprises, organizations, the collection and processing of statistical information, sample surveys, and observations.

Regulatory It is customary to call indicators usually established by management bodies or established in business practice and expressing resource consumption rates(raw materials, energy, materials, labor, money) for the production of a unit of output, performance of work, consumption (consumption standards). Indicators in the form of norms and standards (universal norms) also reflect accepted, specified ratios and proportions, such as, for example, the rate of accumulation, savings, profit, wages, and taxation.

They are also used in economics scientific and technical indicators, characterizing the achievements of science, technology, technology.

Depending on the areas, spheres of the economy, the type of economic processes characterized by certain economic indicators, it is customary to distinguish such groups and types as indicators of needs, resource provision, production, distribution, exchange, consumption, costs, efficiency, reserves, sustainability, reliability , risk, prices, demand, supply, income, expenses, standard of living, and many others;

From single, individual, homogeneous indicators related to primary cells, links, and the smallest elements of the economy are formed group, summary, aggregated indicators characterizing economic objects and processes on a larger scale, covering the entire region (regional indicators), industry (industry indicators), the economy of the country as a whole (national economic, general economic indicators), world economy (global indicators).

Along with summary, generalized indicators and even as their quality, they are widely used in economics. average indicators in the form of the average value of a broad set of values. It is important to know that the average economic indicator is not necessarily the arithmetic mean of a group of homogeneous indicators, as people who are unfamiliar with economics, as well as economic and mathematical statistics, sometimes believe. More representative are considered weighted average indicators. If, for example, “n” people receive annual income A, “m” people receive income B and “p” people receive income C, then the average income D is calculated not as 1/3 (A + B + C), but according to the formula :

D = (nA + mB + pC) / (n + m + p)

which gives much more representative results.

The composition of economic indicators is constantly supplemented and updated, and methods for their determination are also improved. Economic indicators are most widely used in analysis, forecasting, planning, and management. The success of managing the economy, economic objects and processes significantly depends on the range of indicators used, the degree of completeness with which they characterize the managed objects and processes, and on how accurately and correctly these indicators are defined and worked out by economic science.

System for the formation of economic indicators as a basis for analysis

Similar indicators can be calculated using.

Return on labor costs= Volume of production / Cost of living labor

Labor intensity= Cost of living labor / Volume of production

There are, in addition, a number of indicators expressing. The most important of these indicators is average annual production per worker.

In the process of economic analysis, indicators are also used that express movement, availability and condition of certain types of production resources. There are indicators that express efficiency of investments made, mainly capital investments. The main such indicators are payback period of capital investments, as well as profit per ruble of capital investment.

What is the degree of progressiveness of this enterprise? The following indicators answer this question: level of mechanization, expressing the share of mechanized production processes in the total volume of the latter; automation level, characterizing the share of automated production processes in their total volume.

Finally, there are general economic indicators that directly characterize a given enterprise. First, let’s call the value of the organization, otherwise the value of the organization’s property complex. Another indicator is the market value of an enterprise, which is the value of the shares of a given enterprise corresponding to market conditions.

A comprehensive assessment of the enterprise’s activities is reflected in the construction of the so-called multiplier. It is an integral, complex indicator that is based on private indicators that reflect the activities of the enterprise. Distinguish two types of multipliers: standard and subjective. The former can be used when assessing the activities of any organization, while the latter can only be used for one specific organization. An example of a standard multiplier is an assessment of the probability of bankruptcy of an organization based on the Altman method. This method is based on determining the sum of five financial ratios. Each of them has a certain weight. The economic literature describes in detail the essence of this method and methods of its application.

Subjective multipliers make it possible to study those indicators that are not covered by standard multipliers.

The system of formation of economic indicators discussed in this article thus serves as the basis for carrying out.

Concept of economic analysis

Economic analysis is important for the economic growth and development of an enterprise of any level and scale of activity.

Definition 1

Economic analysis is a science that studies the economy of an enterprise, its activities in terms of implementing plans and development strategies, assessing its financial and property status, as well as identifying potential reserves in different directions.

The subject of economic analysis is the property and financial condition of the company, its current financial and business operations, which are considered from the point of view of the implementation of business plans and development forecasts.

Economic analysis comprehensively studies information obtained from all sources, directs the results of the analysis to improve and optimize the company's activities, and allows for the implementation of the best management ideas.

The object of economic analysis is a specific area of ​​activity of the enterprise: production, sales, supply, investment, activities of individual production and financial structures, etc.

Economic analysis, despite its isolation and emergence as an independent economic discipline, is closely interconnected with other sciences

Main economic indicators

Economic indicators are usually divided into groups, depending on which side financial activities they reflect.

The main indicators are:

• Yield
• Profitability
• Profitability

The company's profitability is most fully reflected by an indicator that is calculated by calculating the ratio of net profit received for a period to the average equity capital of the company for the same period.

The profitability indicator is also important. It is calculated by dividing the profit received for the period by the revenue from sales of products for the same time period.

Enterprise profitability indicators are relative values.

There are a large number of profitability indicators. The most important, of course, is the return on assets indicator, calculated using the formula:

$Rassets = Net profit / Avg. assets$

There are other profitability indicators. Their calculation comes down to calculating the ratio of profit to the analyzed indicator (revenue, capital, cost, etc.)

Note 1

In addition to relative values, absolute indicators also play an important role: the amount of overdue accounts receivable, the amount of accounts payable, the amount of current assets of the company, the amount of equity capital.

For manufacturing enterprise The working capital turnover ratio is of great importance. The most important of them are:

• Duration of turnover (in days)
• Number of revolutions per period.

Note 2

The higher the turnover of working capital, the more stable and productive the enterprise and the use of its capital, the higher the level of business activity of the company.

The role of analysis of economic indicators in an enterprise

Economic analysis is important in an enterprise. Performing a management function, economic analysis is closely interconnected with planning and forecasting at an enterprise, since without conducting in-depth analysis it is impossible to carry out competent business planning.

Economic analysis serves as a justification for the proposed plans and forecasts, as well as one of the means of monitoring their implementation. After all, planning begins with analysis and ends with it.

Economic analysis, as mentioned above, is also an element of management, especially in production.

The overall role of economic analysis increases with the development of economic and financial relations. This is due to a number of factors, such as:

• The need to increase efficiency
• Transition to market relations
• Development of new forms and methods of management.

The performance of the enterprise can be characterized by the following indicators: - economic effect; - performance indicators; - capital payback period; - break-even point of farming.

Economic effect- this is an absolute indicator (profit, sales income, etc.) characterizing the result of the enterprise’s activities. The main indicator characterizing the economic effect of the activities of a manufacturing enterprise is profit. The order of profit generation is shown in Figure 3.7.

Rice. 3.7. The procedure for generating profit

Profit P r from sales of products (sales) is the difference between sales revenue (V r), the costs of production and sales of products (full cost of Z pr), the amount of value added tax (VAT) and excise taxes (ACC):

P r = V r - Z pr - VAT - ACC.

Profit from other sales (P pr) is the profit received from the sale of fixed assets and other property, waste, intangible assets. It is defined as the difference between revenue from sales (V pr) and the costs of this sale (Z r):

P pr = V pr - Z r.

Profit from non-operating operations is the difference between income from non-operating operations (D inn) and expenses on non-operating operations (R in):

P in = D in - P in.

Income from non-operating transactions is income from equity participation in the activities of another enterprise, dividends on shares, income from bonds and other securities, income from leasing property, fines received, as well as other income from operations not directly related to the sale of products .

Expenses on non-sales operations are the costs of production that did not produce products.

Balance sheet profit: P b = P r + P pr + P int. Net profit: Pch = Pb - deductible. Retained earnings: Pnr = Pch -DV - percent.

Profit distribution procedure

Profit can be distributed in the directions indicated in Fig. 3.8.

Rice. 3.8. Profit distribution

A reserve fund is created by an enterprise in case of termination of its activities to cover accounts payable. The formation of a reserve fund for enterprises of certain organizational and legal forms is mandatory. Contributions to the reserve fund are made in accordance with current regulations.

The accumulation fund is intended for the creation of new property, the acquisition of fixed and working capital. The size of the accumulation fund characterizes the enterprise's capabilities for development and expansion.

The consumption fund is intended to carry out activities for social development and material incentives for the company’s personnel.

The limitation of economic effect indicators is that they cannot be used to draw conclusions about the quality level of resource use and the level of profitability of the enterprise.

Economic efficiency- this is a relative indicator that compares the effect obtained with the costs that determined this effect, or with the resources used to achieve this effect:

Some of these indicators were considered. For example, these are capital productivity indicators and the working capital turnover ratio, which characterize, respectively, the efficiency of using fixed assets and working capital.

The degree of profitability of an enterprise can be assessed using profitability indicators. The following main indicators can be distinguished:

A) product profitability(certain types) (R p) is calculated as the ratio of profit from the sale of products (P r) to the costs of its production and sale (Z pr):

b) profitability of core activities(R od) - the ratio of profit from the sale of products to the costs of its production and sale:

where P r.v.p - profit from the sale of all products;

Z pr.v.p - costs of production and sales of manufactured products;

V) return on assets(Ra) - the ratio of book profit to the total of the average balance (K avg). This indicator characterizes how effectively the enterprise's fixed and working capital is used. This indicator is of interest to credit and financial institutions, business partners, etc.:

G) return on fixed capital(R o.k) - the ratio of book profit (P b) to the average cost of fixed capital (Of s.g):

d) return on equity(R s.k) - the ratio of net profit (P h) to the average cost of equity capital (K s.s):

This indicator characterizes the profit generated by each ruble invested by the owner of the capital;

e) capital payback period(T) is the ratio of capital (K) to net profit (P h).

This parameter shows how many years will it take for the funds invested in this enterprise to pay off under constant conditions of production and financial activity.

Break-even point for farming. The concept of breaking even can be expressed as a simple question: how many units of output must be sold to recover the costs incurred.

Accordingly, prices for products are set in such a way as to reimburse all semi-variable costs and obtain a premium sufficient to cover semi-fixed costs and make a profit.

As soon as the number of units of production (Q cr) is sold sufficient to compensate for the semi-fixed and semi-variable costs (full cost), each unit of production sold in excess of this will make a profit. Moreover, the amount of increase in this profit depends on the ratio of semi-fixed and semi-variable costs in the structure of the total cost.

Thus, as soon as the volume of units sold reaches a minimum value sufficient to cover the full cost, the company makes a profit, which begins to grow faster than this volume. The same effect occurs in the case of a reduction in the volume of economic activity, that is, the rate of decline in profits and increase in losses outpaces the rate of decrease in sales volumes. The definition of the break-even point of farming is shown in Fig. 3.9.

Rice. 3.9. Determining the break-even point of farming