Break even- this is the volume of production and sales of products at which expenses will be offset by income, and in the production and sale of each subsequent unit of production, the enterprise begins to make a profit.

In other words, the break-even point is understood as such a moment when the company fully covers the losses and the company's activities begin to bring real profit.

The break-even point is the sales volume at which the company's profit is zero. Profit is the difference between income and expenses.

The break-even point is measured in physical or monetary terms. This indicator of the break-even point allows you to determine how many products need to be sold, how much work to perform, or services to provide, so that the company's profit would be equal to zero.

Thus, at the break-even point, income covers expenses. If the break-even point is exceeded, the company makes a profit, if the break-even point is not reached, then the company incurs losses.

What is the purpose of the breakeven point?

The break-even point calculation allows you to:

determine the optimal cost of selling products, performing work or providing services;

monitor changes in the break-even point indicator in order to identify existing problems in the process of production and sale of products, performance of work, provision of services;

analyze the financial condition of the enterprise;

find out how a change in the price of products sold, work performed, services provided or costs incurred will affect the resulting revenue.

Break-even point and practice of its use

Break-even point analysis is used for various purposes.

Let's consider some directions and purposes of using this indicator.

We give in the table the goals of the possible use of the break-even point indicator in practice:

The use of the break-even point model is used in management decisions and allows you to give a general description of the financial condition of the enterprise, assess the level of critical production and sales in order to develop a set of measures to increase financial strength.

Steps to determine the break-even point

In practice, there are three stages to determine the break-even point of the enterprise.

Gathering the necessary information to carry out the necessary calculations. Evaluation of the level of production volume, product sales, profit and loss.

Calculation of the size of variable and fixed costs, determination of the break-even point and safety zone.

Assessment of the required level of sales / production to ensure the financial sustainability of the enterprise.

The task of the enterprise is to determine the lower limit of its financial stability and create opportunities for increasing the security zone.

Calculation of the break-even point and variable, fixed costs

To find the break-even point, you need to determine which of the costs of the enterprise are related to fixed costs and what costs are included in variable costs.

Since these costs affect the determination of the break-even point and are mandatory components for calculating the break-even point.

Fixed costs include: depreciation deductions, salaries of administrative and managerial personnel with deductions from wages to off-budget funds, rent of office space and other expenses.

Variable costs include: materials, components, semi-finished products used in production, fuel and energy for technological needs, wages of key workers with deductions from wages to off-budget funds and other expenses.

Fixed costs do not depend on the volume of production and sales and do not change over time.

At the same time, the following factors can affect the change in fixed costs: growth / fall in the productivity of the enterprise, opening / closing of production shops, increase / decrease in rent, inflation and other factors.

Variable costs depend on the volume of production and change along with the change in volume. Accordingly, the greater the volume of production and sales, the greater the variable costs. Variable unit costs do not change with the volume of production. Variable costs per unit of output are conditionally fixed.

Formula for calculating the break-even point

To calculate the break-even point, you need the following indicators:

1. Calculation of the break-even point (BBU) in kind:

BEPnat = TFC / (P-AVC)

BEPden = BEP nat * P

Variable costs for the production of a unit of output (AVC): 100 rubles;

Selling price (P): 200 rubles.

Substitute the original values ​​in the formula:

BEP nat = 50,000 / (200-100) = 500 pieces.

BEPden \u003d 500 pcs. * 200 rubles. = 100,000 rubles.

2. Calculation of the break-even point (BBU) in monetary terms:

BEPden = (TR* TFC) / (TR-TVC)

You can also calculate the break-even point through marginal income.

MR = TR-TVC, or MR per unit =P-AVC

KMR = MR / TR, or KMR per unit = MR per 1 unit /P

Based on the obtained values, we get:

BEPden = TFC / KMR

For clarity, consider a numerical example:

Fixed expenses of the enterprise (TFC): 50,000 rubles;

Variable expenses (TVC): 60,000 rubles;

Revenue (TR): 100,000 rubles.

Substitute the values ​​in the formula:

BEPden \u003d (100,000 * 50,000) / (100,000-60,000) \u003d 125,000 rubles.

MR = 100,000-60,000 = 40,000 rubles

KMR = 40,000 / 100,000 = 0.4

BEPden \u003d 50,000 / 0.4 \u003d 125,000 rubles

Thus, it can be seen that the BEP values ​​calculated by the two formulas are equal.

If an enterprise sells its goods for 125,000 rubles, then it will not suffer losses. As for the coefficient of marginal income, it shows that each ruble of revenue received from above will bring in this case 40 kopecks of profit.

conclusions

The break-even point model allows you to determine the minimum allowable limit of sales and production for the enterprise. This model can be well used for large enterprises with a stable market.

The calculation of the break-even point allows you to determine the safety zone - the remoteness of the enterprise from the critical level at which profit is zero.

Any business is created for the purpose of making a profit, and sometimes it is important to understand at what volume of sales the company will operate at a loss, and when it will start to make a profit. The line separating these volumes has a telling name - the profitability threshold, that is, the level at which there is still no profit, but there is also no loss. Thus, the threshold of profitability is the moment of self-sufficiency. Often referred to as the break-even point, it is an effective tool in production planning, sales volume estimation, payback periods and financial risks.

Profitability threshold: formula

in natural units, when determining the number of units of production that should be sold in order to cover the costs incurred and reach zero profit (PR 1);

in monetary terms, which determines the value of this volume (PR 2).

The calculation of PR is based on cost indicators - constant (remaining unchanged with fluctuations in output and sales volumes) and variable (changing depending on changes in production and sales volumes). Constants include depreciation of property, salaries of AUP, marketing costs, rent and utility payments. Variables are the costs of acquiring raw materials and components, wages of shop workers, paying for the cost of energy and heat resources, etc.

The value of PR 1 determines the volume of sales at which profit will be zero.

The formula for calculating PR in natural units:

PR 1 \u003d R post / unit / (C unit - R per / unit),

where Р post/unit and Р trans/unit - the average sum of fixed and variable costs per unit of output,

C unit - the price of a unit of goods.

The PR indicator in monetary terms is calculated by the formula:

PR 2 \u003d B x R post (B - R lane),

where R post and R lane - total fixed and variable costs,

B is revenue.

The value of PR in this case determines the cost of produced and sold goods by the time the payback is achieved.

Profitability threshold calculation: example

Suppose a company manufactures and sells products, each unit of which has an average of 200 rubles. fixed costs and 100 rubles. variables. The price of a unit of goods is 150 rubles.

Using the formulas, we calculate:

PR 1 \u003d R post / unit / (C unit - R per / unit) \u003d 200 / (150 - 100) \u003d 4, i.e., to reach the break-even point, you need to sell 4 units of goods.

PR 2 \u003d B x R post / (B - R lane) \u003d 150 x 200 / (150 - 100) \u003d 600 rubles, i.e. in monetary terms, the volume of output and sales to achieve the profitability threshold will be 600 rubles.

These calculations show analytics - if the sales volume does not reach the calculated values, the company incurs losses, and vice versa, an excess of indicators indicates that the company makes a profit, having overcome the zero threshold.

The simplicity of the calculations of this example is due to the ideal initial data, which, of course, you will not find in real conditions: all indicators remain unchanged, although in life an increase in sales volumes causes an increase in costs, and it is not always possible to fully sell all manufactured products. We only introduce the reader to the calculation algorithm, and the company will have to adapt the calculations to the current market situation on its own.

We offer a more complex version of the calculation of PR.

Example: how to calculate the profitability threshold for a manufacturing enterprise

An industrial enterprise specializing in the production of 3 types of parts. In the table, we combine both the initial data and the calculation of PR:

By grouping the costs according to variable and fixed criteria, we calculate the profitability threshold:

PR 1 \u003d R post / (C unit - R per / unit) \u003d 58000 / (424 - 191.8) \u003d 249.78 pcs.

PR 2 \u003d B x R post / (B - R lane) (212000 x 58000) / (212000 - 95900) \u003d 105908.70 rubles, i.e., in order to reach the breakeven level and cover the invested costs, it is necessary sell 249.78 units. goods for a total amount of 105,908.70 rubles. Further sales will become profitable.

One of the most important stages in planning the organization's activities is to consider options for possible changes in the market situation and the possibilities of the organization's activities in these conditions.

One of the most accessible methods for managing business activities and financial performance is operational analysis, carried out according to the scheme: costs - sales volume - profit. This method allows you to identify the dependence of the financial result on changes in costs, prices, production volume and product sales.

With operational analysis, you can:

1. evaluate the profitability of economic activity;

2. predict the profitability of the organization;

3. assess business risk;

4. choose the best ways out of the crisis;

5. evaluate the profitability of investments;

6. develop the most beneficial assortment policy for the organization in the field of production and sales.

The key elements of operational analysis are the following indicators:

Critical volume of production and sales of products;

Threshold of profitability;

margin of financial strength.

Business break-even analysis is one of the main tools for solving a large class of management tasks. Through such an analysis, it is possible to determine the break-even point and financial safety margin (safety zone), plan the target production volume, set product prices, select the most efficient production technologies, and adopt optimal production plans.

Break-even point (profitability threshold)- this is the minimum allowable sales volume, which covers all the costs of manufacturing products, while not bringing any profit or loss.

If the company produces only one type of product, the break-even point is calculated by the formula:

TB \u003d PZ / (C - Per.Z.ud.),

TB - breakeven point, units.

ПЗ - fixed costs, rub.;

P is the price of a unit of production, rub./unit;

Ln.Z.ud. - variable costs per unit of production, rub./unit;

(C -. Per.Z.ud) - marginal income per unit of production, rub. / unit.

In value terms, the profitability threshold is determined as follows:

TB \u003d PZ / Kmd,

TB is the critical amount of revenue, rub.

Кмд - coefficient of marginal income;

Kmd = MD / N

N - sales revenue, rub.

MD \u003d N - Per.Z.

If there is more than one type of product, the break-even point can be determined for the business as a whole or for individual types of products.

The difference between the actual or planned sales proceeds (Nactual, - Nplan) and the critical amount of proceeds (TB) characterizes margin of financial safety (FFP):

ZFP = Nfact - TB

or ZFP = Nplan - TB

An entity with no risk of loss can reduce the sales proceeds by the amount of the FFP. The margin of financial strength can be determined not only in absolute terms, but also relative:

KZFP \u003d ZFP / Nfact * 100%

or KZFP = ZFP / Nplan * 100%

Financial safety factor reflects the percentage of allowable reduction in sales revenue without the risk of loss.

The safety indicator is often used to assess operational risk: the higher the indicator, the safer the situation, since the risk of lowering the equilibrium point is less.

Security questions on the topic

1. What is the role of economic analysis in planning the activities of the organization?

2. What is the meaning of budget planning in an organization?

3. What are the main methods used in developing a business plan?

4. How is the sales budget developed?

5. What is the production budget?

6. How is the estimate of direct material costs?

7. How is the cost estimate for wages and general production costs compiled?

8. How is the estimated cost of production calculated?

9. What costs are fixed and variable?

10. What method can be used to divide the total costs into fixed and variable?

11. How is margin income calculated?

12. How is the profitability threshold calculated?

Tests

1. The total need for working capital is determined:

a) the structure of equity

b) the profitability of the production of this type of product

c) the scale of production and the time of turnover of current assets

2. With a decrease in variable costs, the profitability threshold of the organization:

a) remains the same

b) rises

c) goes down

3. How will the increase in fixed costs affect the financial strength of the organization:

a) will increase

b) decrease

c) stay the same

4. How will the increase in fixed costs affect the critical sales volume?

a) the critical volume will decrease

b) the critical volume will not change

c) the critical volume will increase

5. The organization's operating budget includes:

a) the budget for direct labor costs;

b) cash flow budget;

c) investment budget.

6. The forecast cash flow statement is developed on the basis of:

A) long-term sales forecast

B) general business overhead budget

B) capital investment budget

d) pro forma income statement

7. The financial indicators of the business plan must be balanced:

a) with indicators of capital intensity

b) with indicators of the volume of production and sales of products

c) with profitability indicators

8. The threshold of product profitability (the point of the critical volume of production) is determined by the ratio:

a) fixed costs to revenue from product sales

b) fixed costs to variables

c) fixed costs to marginal income per unit of output

9. The company's operating budget includes:

a) the budget for direct labor costs

b) cash flow budget

c) investment budget

10. Top-down budgeting process:

a) carried out by employees directly involved in the production process

b) requires general budget directives

c) is characterized by a positive attitude of managers at lower levels of management

d) better reflects organizational goals

11. The zone of safe or stable operation of the organization is characterized by:

a) the difference between marginal income and fixed costs

b) the difference between marginal income and profit from product sales

c) the difference between the actual and critical volume of sales

12. The cost elements for the production and sale of products (works, services) are:

a) raw materials, materials, fuel, energy, wages, depreciation

b) depreciation, material costs, wages, general business expenses.

13. One of the methods of drawing up a financial plan is:

a) percentage of sales method

b) chain substitution method

14. The organization's budget is:

a) forecast balance

b) a quantitative plan in monetary terms, showing the planned amount of income and expenses

Practical tasks

1. Determine the profitability threshold for sales of new products (PR). Estimated unit price (C) - 500 rubles. Variable costs per unit of production (PeryuZ.ed.) - 60%. The annual amount of fixed costs (FC) is 200 thousand rubles.

2. Determine the amount of financial safety margin, If:

sales revenue (N) is 600 tr., variable costs (Per.Z) - 300 tr., fixed costs (PC) - 150 tr.

3. . The share of marginal income in sales revenue is 30%; sales volume at the break-even point - 600 thousand rubles. What is the amount of fixed costs?

4. Determine the critical sales volume (TB)if:

Fixed costs (PC) - 200t. rubles

Variable costs per unit of production (Per.Z.ed) - 800 rubles

The price of a unit of production is 1800 rubles.

5. What is the value of contribution margin, If:

Sales proceeds - 120,000 rubles.

Fixed costs - 30,000 rubles.

Variable costs - 70,000 rubles.

6. Determine the point of critical sales volume (TB), If:

Sales proceeds (N) - 6000 thousand rubles.

Fixed costs (FC) - 1000 thousand rubles.

Variable costs (Per.Z) - 2000 thousand rubles.

7. Determine the amount of profit (P), If:

Marginal income (MD) - 3000t.r.

Fixed costs (FC) - 1500t.r.

Sales proceeds (N) -8200t.r.

8. As of the reporting date, the organization has the following indicators:

At the beginning of the period At the end of the period

Stocks of materials: 2,750 3,250

Costs in work in progress 4,800 4,000

Finished products 2,500 1,250

The following expenses were incurred during the reporting year:

For materials - 20,000 rubles.

For wages - 11,000 rubles.

General production expenses - 16,500 rubles.

Entrepreneurial activity always sets itself the main task of making a profit. Otherwise, it doesn't make sense.

One of the main factors influencing profit is conducting an effective, correct and timely financial and economic condition of the enterprise and efficiency in the use of its resources.

Key business performance indicators

When conducting a financial and economic analysis of any enterprise, it is necessary, initially, to calculate a number of standard indicators.

These include:

• profitability certain business activities under certain conditions;
• payback period invested capital;
• break even or the threshold of profitability of the financial and economic activities of the organization;

Profitability threshold

Determining the threshold of profitability is very important for the further effective operation of the organization. The profitability threshold indicator shows how much product to produce and sell and how many services to provide in order to pay off all costs.

That is, this is the volume of goods or services in which the profit (loss) is equal to zero.

Why is this indicator needed, what is measured by it

The profitability threshold indicator must be calculated from various points of view:

• this indicator characterizes the state of the organization when it does not make a profit, but still remains "afloat";
• knowing this indicator, it is possible to determine, having crossed which barrier the enterprise will bring more and more profit or fall at a loss;

The formula for calculating the threshold of profitability

The threshold of profitability of any organization can be calculated in two ways:

1. In terms of money

Pr \u003d (Revenue * Fixed costs) / (Revenue - variable costs)

1. in kind

Pr \u003d Fixed costs / (cost of a unit of goods (services) - cf. variable costs per unit of goods (services))

Determination of the threshold of profitability graphically

You can also determine the indicator of the profitability threshold and analyze the results obtained graphically. This method makes it possible to visually see in what situation the business efficiency increases, and in what situation it decreases.

To build a graph, you need the following:

• It is necessary to calculate the indicator of the threshold of profitability for several sales volumes and mark all points on the charts;
• Draw a straight line through the given points. or a curve that unites them;

An example of plotting a chart can be viewed at http://finzz.ru/porog-rent-formula-primer

Profitability threshold calculation in Excel

It is convenient to calculate such an indicator as Profitability threshold in Excel.

To do this, do the following:

• write a different volume of production or sales in one column;
• in another column, the fixed costs corresponding to each volume;
• in the third column, variable costs corresponding to each volume;
• it is required to enter in a separate cell the cost of one unit of product or service;
• the last column contains the formula for calculating the profitability threshold;

The main indicators of profitability are:

• Indicator of the efficiency of production assets;
• Indicator of profitability of goods and services;
• Efficiency of financial investments in the main business activities of the organization;

Sensitivity and profitability analysis

When calculating the threshold of profitability, it is important to assess the impact of changing the initial parameters on the result, which is obtained in the end. Such an analysis is called sensitivity and profitability analysis.

As a result, obtained as a result, they are guided by the organization's rate of return and the NVP indicator.

Financial indicators

Equally important is the definition and other financial indicators among which are:

• break-even point (profitability threshold in monetary terms, often shown graphically);
• financial strength;
• operating lever;

Break even

The break-even point shows clearly, that is, graphically, at what volume of products sold (services provided) the company will not receive a profit, but will not fall at a loss.

In fact, the break-even point is a synonym for the profitability threshold.

Break even point formula

You can use the following calculations:

Break Even Point = (Revenue*Fixed Costs) / (Revenue - Variable Costs)

Break even chart

The break-even chart is built similarly to the graphical representation of the profitability threshold.

Margin of financial strength

From the calculation of the break-even point, the definition of two more important indicators for the analysis of the financial and economic activities of the organization follows. One of them is margin of financial strength.

It shows the percentage of real production and sales to the volume at the point where profits (losses) are equal to zero.

The higher the percentage obtained from this ratio, the stronger the enterprise is considered.

Operating lever

Another indicator that follows from the definition of the break-even point is called operating leverage. It is characterized by determining the reaction of changes in profits depending on changes in income.

Formulas

Operating leverage (price) = revenue from all sales for a certain period / profit received from all sales for the same period

Operating leverage (natural) = (revenue - variable costs) / profit

net present value method

NPV or net present value method means valuing business activities in terms of discounted cash flow.

To carry out such an analysis, it is necessary to find amount of incoming and outgoing cash flows associated with a particular investment project.

Formula for calculating NPV

NPV = ∑ (NCFi)/(1+r) – Inv, Where

NCFi is the flow of funds for the i-th period

r - discount rate

Inv - financial initial investment

Discount calculation

Discounting means finding the value of financial flows that the company should receive in the future.

To do this, you need to know the following estimated values:

• revenue;
• investments;
• expenses;
• discount rate;
• the residual value of the property of the organization;

Discount rate

The discount rate is determined by the rate of return on financial investments required by investors.

Payback period of the project

Another important indicator for investors in determining the effectiveness of an investment project is its payback period. This indicator shows how much time must be spent in order for income to cover all expenses together with investments.

Discounted payback period

The most applicable to determine the payback of the project is the discounted payback. This indicator determines exactly the time for which it is possible to return the money invested in the "case" at the expense of the net financial flow, taking into account the discount rate.

Internal rate of return

When the net present value is zero, the interest rate is called the internal rate of return. This is another indicator characterizing the profitability of investment projects of the organization.

Coverage ratio

Having determined the ratio of current assets to short-term liabilities, it is possible to calculate the indicator that determines the coverage ratio.

It shows the organization's ability to pay current financial obligations to other business entities from working capital.

Summary

To conduct an effective financial and economic analysis, it is necessary to calculate the following indicators:

• enterprise profitability threshold at different volumes of production;
• calculate the breakeven point;
• company resilience will show the indicator of financial strength and operating leverage;
• to determine the effectiveness any investment projects must initially calculate the discount rate, internal rate of return, and discounted payback period;
• for a more visual analysis the profitability threshold should be calculated in Excel or displayed graphically;

Profitability- This is an indicator of performance in the use of labor, economic, material and natural resources.

Profitability threshold- this is a set of sales products, thanks to which the company covers its costs for its production without making a profit from sales, that is, it goes to zero.

If we talk about trading companies, then profitability is expressed by specific numerical characteristics, that is, the correlation of profit and investment. A business is profitable if at the end of the year the company is in the "plus".

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The profitability ratio is the ratio of profit to resources (tangible assets, flows, etc.) that form this profit.

Most often, profitability is determined as a percentage. But in some cases, it can be presented in the form of profit per unit of invested assets, or in profit from each financial unit earned.

Depending on the type of business activity, profitability is classified as follows:

1. The overall profitability of tangible assets. It is formed by the ratio of profit (before taxes) to the totality of tangible assets attracted to the company for a fixed period of time.
2. Product profitability. It is determined as the result of dividing the profit from the sale of goods by the costs of its manufacture.
3. Profitability of production. Production is considered profitable, where the profit from investments exceeds the costs of manufacturing goods. Among the methods that have an impact on the growth of profitability, there is a reduction in the cost of manufactured products and an improvement in quality properties.

General view of the mathematical expression of profitability:

P \u003d P / I * 100%, where:

• R– profitability;
• P– profit received during the implementation of the project;
• AND- investment in the project.

Determination of the threshold of profitability

It is determined by the formula:

• Profitability threshold = Fixed costs / ((Revenue from sales - Variable costs) / Revenue from sales).

When the profitability threshold is reached, the company has neither profit nor loss.

The value of the break-even point is of great importance for investors, as it reflects the ability to repay the debt on the loan. The reliability of the enterprise is determined by the excess of the level of sales over the value of the threshold of profitability.

The degree of remoteness of the value of the profitability of the enterprise from the break-even point is determined by the margin of financial strength.

To obtain the value of the financial safety margin, it is necessary to find the difference between the actual number of goods produced and the number of goods produced at the break-even point.

Calculation formulas

Calculating the value of the break-even point, we get the marginal amount of income from the sale of products. Selling goods at a lower price makes the business unprofitable.

Thus, the company will make a profit only when the income becomes higher than the marginal value of profitability.

In terms of money

Prd \u003d VxZpost / (V - Zperem), where:

• Prd- break-even points in value terms;
• IN
• Zperem- variable costs;
• Zpost- fixed costs.

in kind

Prn \u003d Zpost / (B - ZSperm), where

• Prn– profitability threshold, value in units of goods;
• Zpost- the value of fixed costs;
• ZCchange- the average value of variable costs (for 1 product);
• IN- total level of income (revenue);

Examples

Example of calculation in monetary terms:

1. The company sells 200 pcs. goods at a price of 300 rubles / 1 pc.
2. Variable costs in the cost of a unit of goods are equal to 250 rubles.
3. Direct costs in the cost of a unit of goods - 30 rubles.
4. Indirect direct costs in the cost of a unit of goods - 20 rubles.

It is required to determine the break-even point of the enterprise.

We calculate the profitability threshold in value terms:

• Zpost\u003d (30 + 20) x200 \u003d 10,000 rubles.
• Zperem\u003d 250 x 200 \u003d 50,000 rubles.
• IN\u003d 200x300 \u003d 60,000 rubles.
• Prd\u003d 60000x10000 / (60000-50000) \u003d 60000 rubles.

The resulting break-even point reflects that the company will make a profit after selling goods in the amount of more than 60,000 rubles.

Calculation example in physical terms:

Prn(Profitability threshold in units of goods) = 10000/(300-250) = 200.

For an example calculation, let's take the same input data.

Thus, the company will make a profit after the sale of 200 units of goods.

Basic indicators

In order to analyze the financial condition of the company, the following criteria for assessing profitability are used:

1. The coefficient of economic profitability. The rate of return on tangible assets reflects the amount of profit received from all assets that the company has. The decrease in the profitability of monetary assets is characterized by a decrease in demand for the company's products.
2. Financial profitability ratio. The return on equity ratio reflects the degree of profitability of the company's capital. In this regard, this indicator is very interesting for a certain circle of people, namely, shareholders and the owner of the enterprise.
3. Activity profitability ratio. This indicator is determined by the ratio of the company's net profit to net sales revenue. The growth of this indicator indicates an increase in the effectiveness of the company, and the decrease, on the contrary, indicates its unproductive activity.
4. Economic profitability- this is one of the most important criteria for the attractiveness of the company, because the level of profitability reflects the upper threshold of interest.

Factors affecting profitability

External

The high efficiency of company management cannot reduce the level of influence of external factors on business profitability.

These types of factors include:

• territorial location of the company (remoteness from sales centers, raw material deposits, etc.);
• competitiveness of goods and demand for it;
• changing position in the markets;
• state influence on the economy (regulation of the market at the legislative level, adjustment of the refinancing rate, changes in taxation laws, etc.);

Production

• means of production;
• labor resources;

The influence of these factors on the functioning of the company can be characterized from two sides:

• extensive influence (determined by a change in the numerical parameters of the production process) includes:
• change in temporal and quantitative indicators of the production process;
• change in the means of production (related to fixed assets: equipment, buildings, etc.) and their quantity (for example, an increase in the number of stocks);
• change in the number of jobs, change in work schedules, downtime;
• intensive influence is associated with an increase in the efficiency of the use of production factors;

It includes:

• maintenance of equipment in the best condition, and its timely replacement with a technologically more advanced one;
• application of modern materials, improvement of production technology;
• increasing the level of personnel qualification, lowering the level of labor intensity of products, the correct organization of the labor process.