The growth rate is used in the analysis of any series of dynamics. The growth rate formula is often used in statistics and economics in conjunction with such an indicator as the growth rate (as a percentage).

DEFINITION

Growth rate shows how many times the indicator has changed compared to the baseline, and rate of increase reflects how much the investigated value has changed.

If the result of the calculation is a positive value, then we can talk about an increasing growth rate, while a negative value results in a decrease in the rate of the studied value, if compared with the previous (basic) period.

The growth rate formula is often used in the analysis of investment projects. Also, this indicator is often used by municipal organizations in the calculations:

• calculation of population growth;
• future need for buildings;
• volume of services, etc.

Growth rate formula

To calculate the growth rate, you need to find the ratio of the indicator under study to the previous (basic), then subtract one from the result. The final result is multiplied by 100 to express the total as a percentage. The formula for the growth rate according to the first method looks like this:

Tp \u003d ((Pip / Pbp) -1) * 100%

Here Tp is the growth rate,

In the case when instead of the actual value of the analyzed indicators, only the value of the absolute increase is known, an alternative formula is used. At the same time, the percentage ratio of the absolute increase to the level in comparison with which it was calculated is found.

Tp=((Pip-Pbp)/Pbp)*100%

Here Tp is the growth rate,

Pbp is an indicator of the base period,

Pip is an indicator of the period under study.

A great difficulty for students is the difference between the growth rate and the growth rate. Let's single out several provisions in which the difference between these values ​​lies:

1. The growth rate formula and the growth rate formula are calculated using different methods.
2. The growth rate reflects the percentage of one indicator relative to another, and the growth rate shows how much it has grown.
3. Based on the calculations using the growth rate formula, it is possible to calculate the growth rate, while the growth rate is not calculated using the growth rate formula.
4. The growth rate does not take a negative value, while the growth rate can be both positive and negative.

Examples of problem solving

EXAMPLE 1

By investing in business development, buying stocks, real estate or bonds, an entrepreneur expects to increase investments, that is, to get a gain. To figure out how to calculate growth, you need to understand what it is. Growth is an increase in the value of fixed capital, which provides for the receipt of more funds (profit) during its implementation. Until the asset is sold, it is considered that the income is not received.

The calculation will require the values ​​of the current price and the previous one. The results of the calculation are used to manage financial and economic activities, as well as to maintain statistics. The growth value allows you to determine whether income, the number of customers or any other indicator has increased or decreased over the period under review.

Types of growth

• Implemented- it is received in the event that the investment objects were sold and a profit was made on them.
• Unrealized- occurs when there are investments that are not realized, but can bring profit after the sale.

Management

For the calculation, you will need to set the time interval and determine the initial (base) point. It can be the beginning of a year, a month, or another time period.

The increase can be absolute. Its value is equal to the difference between the indicators of the current and base (or previous) periods. For example, the cost of producing a unit of output at the beginning of the year was 150 rubles, and at the end - 175 rubles. The absolute increase in value amounted to 175-150=25 rubles.

Growth is often considered in relative terms (growth factor). To do this, the value of the current indicator is divided by the base or previous value. For example, 175/150=1.16. This suggests that the cost of production has increased by 1.16 times. To get the value as a percentage, you need to multiply the result by 100%. In our example, this will be 16%.

To analyze the effectiveness of activities or investments, it is required to determine the growth rate. To do this, determine the indicators corresponding to the start and end points. For example, the value of shares at the beginning of 2014 was 250 thousand rubles, and by the end of the year - 420 thousand rubles. Then, the initial value is subtracted from the value of the final indicator (420000-250000=170000). The result must be divided by the initial value and multiplied by 100%. (170000/420000*100=40%). In the considered example, the rate of increase in the value of shares for the year was 40%.

To generalize the results over a long period (for example, several years), the average absolute increase is calculated. To do this, find the difference between the final and initial indicators, then it must be divided by the number of periods.

Growth can be negative. For example, if the value of shares by the end of the year amounted to 210 thousand rubles, then the increase will be equal to:
(210000-250000)/210000*100=-19%.

Depending on the purpose of calculating the absolute increase, the basic or chain methods are used. The basis of the basic method is the comparison of indicators of any period with the base. In the chain method, current indicators are compared with previous ones.

Question: How to calculate profit growth?
Answer: The absolute value is the difference between the current and the baseline (or previous) value. Relative - the result of dividing the current indicator by the base (or previous).

Question: How to get the average monthly increase if several different periods are taken into account?
Answer: To do this, the indicators for each month are calculated separately. Then they need to be added and divided by their number.

Question: When calculated, it received a negative value. What does it mean?
Answer: This means that the investment did not bring profit, but became unprofitable.

In order to calculate the increase (in absolute or percentage terms), it is necessary to have the current value and the one with which the comparison is being made. To establish the dynamics of growth, the time intervals must be equal (for example, a week, a month, or a year).

Growth calculation is used in the management of financial and economic activities, as well as in statistics. Using a simple mathematical formula, you can find out how much your costs or income (personal or company as a whole) have increased over a certain period of time, calculate the increase in customers, and much more. As an example, let's try to calculate the percentage increase using a special formula.

Growth formulas

First you need to have some value that is taken as a starting point. For example, the population of the city M on January 1, 2013. amounted to 100 thousand people.

If you want to know the growth for the year, you will need the value of the population of the city M on January 1, 2014. Let's say 150 thousand people. Now you can calculate the increase.

The increase in absolute value will be equal to the difference between the current value and the previous one:

• From the population in 2014, subtract the population in 2013: 150,000 - 100,000 = 50,000;
• Total: growth for the year is 50 thousand people.

The increase in percentage is equal to the ratio of the current value to the previous one, minus 1, multiplied by 100%:

• We divide the current value of 150,000 by the data on the past period of 100,000. We get 1.5;
• We subtract one: 1.5 - 1 \u003d 0.5;
• Convert to percentage: 0.5 * 100% = 50%;
• Total: population growth for the year is 50%.

To calculate the dynamics of population growth, annual data as of January 1 of each year will be needed.

If the growth value turns out to be negative, then there was a decline during the year (in this case, the population in the city M would decrease).

Each enterprise should provide for planned activities to increase profits.

In general terms, these activities can be of the following nature:

• increase in output;
• improvement ;
• sale or lease of surplus equipment and other property;
• reduction of production costs due to more rational use of material resources, production capacities and areas, labor force and working time;
• diversification of production;
• expansion of the sales market, etc.;
• rational use of economic resources;
• reduction of production costs;
• boost ;
• liquidation of non-production expenses and losses;
• raising the technical level of production.

In a market economy, the importance of profit is enormous. The desire to obtain it directs commodity producers to increase the volume of production needed by the consumer, reduce production costs. With developed competition, this achieves not only the goal of entrepreneurship, but also the satisfaction of social needs. However, economic instability, the monopoly position of commodity producers distort the formation of profit as a net income, lead to the desire to receive income, mainly as a result of price increases.

Despite the fact that profit is the most important economic indicator of the enterprise, it does not characterize the efficiency of its work. To determine the effectiveness of the enterprise, it is necessary to compare the results (in this case, profit) with the costs or resources that provided these results.

The main factors for increasing the profit of the enterprise

As you know, sales profit is the difference between sales revenue and the total cost of products, works, services. Thus, there are two ways to influence (increase, decrease) the profit of the enterprise:

• the first way is cost reduction;
• the second way is to increase revenue, i.e. sales volume.

Consider an example of the interaction of these paths (Fig. 13.1). To increase profit by 100 thousand rubles, it is necessary either to reduce costs by 100 thousand rubles, or to increase sales by 594 thousand rubles. (2994 - 2400).

Obviously, the most profitable option is to reduce costs, since:

Rice. 13.1. Ways to increase profits:

1 - initial version; 2 - the first way, cost reduction; 3 - the second way, increase sales

reducing costs by 4.1% is much easier than increasing sales by almost 25%;

an increase in production volume requires additional costs, including working capital;

increasing sales requires conquering certain market segments.

It should be noted that cost reduction for the enterprise is an objective process. At the same time, not only because of the increase in profits, but also in connection with the competition and the need to reduce prices for manufactured products in certain situations. In these cases, in order to reduce or increase profits, it is necessary to switch to the release of new products in a timely manner.

The main factors influencing the cost reduction of the enterprise:

• Achieving an appropriate level of labor productivity.
• Ensuring the appropriate turnover of the company's funds and, above all, working capital and their sources.
• Optimization of enterprise variable costs.
• Optimization of fixed costs, i.e. overhead, general business and commercial expenses.
• Optimization of the capital structure of the enterprise, own and borrowed funds.
• Implementation of management accounting, improvement of budgeting.
• Supply cost optimization.
• Cost management.
• Other factors.

• Decreased stock levels.
• Elimination of all kinds of losses and unproductive expenses.

The main factors for increasing sales and revenue:

I. Factors - management requirements.

• Flexible production, allowing a constant increase in its volume, timely updating of products, expanding the range.
• Compliance with concluded agreements.
• Optimization of prices and pricing.
• Ensuring the highest quality of products, works, services.
• Periodic review of commercial lending policy.
• Other factors.

II. Factors related to possible reserves.

• Conquest and development of new markets.
• Dealer network expansion.
• Effective activity of the enterprise for the sale of products.
• Other factors.

The purpose of enterprise profit management: optimization of profit planning; obtaining at least the planned profit; optimization of profit distribution in terms of business efficiency.

It should be noted that all activities of the enterprise are aimed at realizing the goal of profit management. Part of this activity is focused on the implementation of another, no less important goal - ensuring the liquidity and solvency of the enterprise.

A profitable policy is as follows.

Analysis of actual financial results:

• the relationship between the income and expenses of the enterprise and its profit,
• financial analysis of revenue, profit and profitability of types
• profit - from sales, balance sheet, taxable, net;
• analysis and optimization of enterprise costs in the process of developing the cost, including the cost of goods sold, commercial and administrative expenses;
• marginal analysis and evaluation of marginal indicators;
• analysis of the capital structure and the financial leverage associated with it, its impact on the return on equity according to the Dupont formula;
• analysis of indicators of the turnover of the company's funds and its impact on the profitability of the company's own funds according to the Dupont formula;
• assessment of profit per share in joint-stock companies.

Analysis and assessment of the role and place of profit in internal financial relations, in the centers of financial responsibility.

Development and justification of a business plan (financial plan), financial budgets of the enterprise, including a forecast profit and loss statement based on the results of the analysis and other economic calculations. Types of documents and their content are determined by the enterprise.

Development of a profitable enterprise policy related to the distribution of net profit, including:

• dividend policy;
• investment policy;
• relation to the consumption fund;
• relation to the reserve fund at the expense of net profit;
• assessment of other payments from net income.

Development of an organizational plan of the enterprise, a kind of profit management regulation, including the principles of operational activities for the implementation of the planned profit.

In addition to the main provisions of the profitable policy outlined above, other provisions may be reflected in the relevant documents.

Sales proceeds is the amount of money received on the accounts of the enterprise for the products shipped to customers or the services rendered to them.

According to its economic content, it is the main source of income for the enterprise.

The receipt of proceeds to the accounts is the final stage of the circulation of the enterprise's funds, which is of decisive importance for ensuring its further normal economic activity. The decisive moment in this process is the date of receipt of funds to the accounts of the enterprise.

It is allowed to record sales of products according to two indicators:

1. in terms of the volume of sales itself;
2. in terms of shipment of products to the buyer.

The following three main factors affect the amount of revenue from sales:

1. the volume of products sold;
2. the level of realized prices;
3. assortment (structure) of sold products.

The volume of products sold has a direct impact on the amount of revenue. The higher the volume of sales in physical terms, the higher the sales revenue. In turn, the volume effect consists of 2 factors:

1. change in the volume of output of marketable products (direct impact on revenue);
2. change in the balance of unsold marketable products.

The growth of such balances has the opposite effect on the amount of revenue. Growth in sales volume is almost the only factor influencing revenue, which is associated with the efficiency of the enterprise.

An increase in the share of more expensive products in total sales also leads to an increase in revenue. However, this is also, as a rule, absolutely not related to efficiency, to improving the work of the enterprise.

Gross profit is the amount of profit (loss) from the sale of products (works, services), fixed assets, other property of the enterprise and income from non-sales operations, reduced by the amount of expenses on these operations.

Non-operating income and expenses - income from equity participation in a joint venture, from the lease of property, dividends on shares, bonds and other securities owned by the enterprise, other income and expenses from operations not related to the production and sale of products, including amounts, received and paid in the form of economic sanctions and damages.

A complex of various factors determines the market conjuncture. In market fluctuations (cycles), as is known, there are four stages: depression, rise, boom, recession. All these stages have an impact on the development of goals, decision-making, the definition of targets, the performance of any enterprise, including a trade one.

The depression stage is characterized by the lowest levels of production, turnover, prices, demand for goods, fixed assets, labor and capital, high costs, unemployment, bankruptcy, low profits and wages, and pessimistic moods.

With the rise, entrepreneurs begin to become more active, production, turnover, and profits increase; price growth slows down, investments increase, the price of securities, the propensity to buy, the number of jobs increases.

In the boom stage, full utilization of production capacities is ensured, wages and prices rise, overemployment increases, scientific and technical activity is activated, entrepreneurs are looking for new directions for investing capital, and there is a danger of rising inflation.

In a recession due to high prices, the sale of all goods (services) is constrained; demand decreases, there is a decline in production, and all this together leads to a crisis.

The second fundamental principle of the economic justification of the volume of retail trade is to ensure the necessary relationship between the dynamics of the performance indicators of the trading enterprise and the forms of intensification. The dynamics of the relationship of indicators is a standard for the efficiency of the use of resources and costs.

In such a standard, the receipt of the necessary mass of profit is brought to the fore, which determines the indicators interconnected with it, the achievement of a specific volume of trade and the growth of the physical mass of sales, ensuring that the goods offered for sale meet the demand of the population. This strategy is based on balancing retail turnover and profit, on the one hand, commodity resources, retail turnover and population demand in terms of volume and structure, on the other, as well as on the development of optimal proportions for their development.

Market segmentation is the division of consumers (or markets) into subgroups or segments. It can be carried out by groups of consumers, consumer properties of goods, main competitors. As you know, the most promising market segment is considered to be the one in which there are approximately 20% of this product and 70-80% of its buyers, which ensures the company's sales and financial success.

Understanding the differences between individual types of customers enables the staff of the enterprise at the stages of procurement, planning and implementation to more closely link needs with the supply of goods and services.

Market segmentation by consumers is based on socio-economic, demographic, geographical, psychological characteristics and aspects of lifestyle. The social group is determined by the level of income, education, occupation; ethnic - by nationality; demographic - by age, sex, religion, size and life cycle of the family and the individual; geographical - by division into urban and rural population, economically developed or developing countries; on a psychological basis - on individual characteristics, purchasing motives, habits or preferences. At the heart of the segmentation by aspects of lifestyle is life activity, interests, position and demographics.

The formation of demand in the market for a particular product, consumer choice, the behavior of individual consumers depend on how their needs are met, what utility a particular product brings. Utility is the satisfaction that comes from consuming a good or service. Distinguish between total utility and marginal utility. Total utility is the satisfaction one gets from consuming a particular set of units of a good or service. Marginal utility is the utility equal to the increase in total utility as a result of acquiring an additional unit of a given good. Marginal utility reflects the degree of urgency of the need and the effect that the consumer will receive from the next purchase of this product or from an additional amount of the product. Based on the study of the theory of marginal utility, the law of diminishing marginal utility is derived. It is formulated as follows: "If the consumption of other goods remains unchanged, then as the need for some good or service is saturated, the satisfaction from the next unit of this good falls." Before sales workers at the level of plan development and its execution, the question arises of how to satisfy needs so that they bring equal marginal benefit. Theoretical studies show that the maximum utility is achieved when the consumer's budget is distributed in such a way that the marginal utility of one ruble (100 rubles, 1000 rubles) of spending is the same for each product. The study of the theory of marginal utility allows us to draw a number of conclusions that can be applied in the practical work of the enterprise.

1. Consumer choice is based on the rational use of the budget and an attempt to maximize the satisfaction of their needs by buying goods and paying for services in a certain combination of them.

2. Consumers make their choice by comparing sets of consumer goods and services. The set may include goods of daily and one-time demand, durables, food, household goods and clothing, luxury goods, etc. At the same time, buying a large number of goods included in this set is most preferable. 3. Consumer preferences are ranked in order of importance for the buyer based on his income, aspects of life, social status. At the same time, the marginal rate of substitution of one good (A) for another (B) is the maximum amount of another good (C) that a person is willing to neglect in order to purchase one additional unit of good A.

4. The set of goods for the purchase of which consumers spend their income also depends on the growth rate of purchasing funds, changes in prices for basic complementary, interdependent and independent goods, the ratio of prices of two purchased or replacing each other products.

5. Consumer choice can be represented either as an indifference curve (when it is possible to rank the ordinal utility properties of an alternative set) or as a utility function (if set "C" is preferable to "A", then the utility of set "C" is higher than "A" ).

6. The more goods are consumed, the smaller the increment of utility.

7. Utility is maximized when the ratio of marginal utilities of two goods is equal to the ratio of prices.

At first glance, such an analysis is possible only in a saturated market. However, this opinion is erroneous. In an unsaturated market and limited buying funds, the forecast of the expected set of purchases, based on the theory of marginal utility, explored with the help of indifference curves, becomes even more important,

The modern strategy for the formation of a production and sales program, used in foreign practice, is built on the idea of ​​a growth matrix or a “portfolio of directions” for business development, developed by specialists from the Boston Group. In accordance with this theory, it is possible to conditionally classify goods by profitability into "stars", "cash cows", "dogs" and "difficult children".

For goods classified as "stars", a quick sale is typical, the provision of which takes large amounts of working capital. They are very popular, have a high payback. Usually in these cases, enterprises have good solvency and a stable financial position. Over time, as their life cycle changes, the implementation of "stars" slows down and they turn into either "cash cows" or, if their market share is declining and they lose competitiveness, into "dogs".

Products that are conditionally classified as "cash cows" have low sales growth rates, but their market share is usually high and they are able to generate revenue in large volumes. The demand for such goods is stable, they bring real sustainable income, which can be used to purchase new goods and support the sale of others, etc.

With the development of market relations, more and more people began to talk about other situations of the origin of revenue growth: these are profits earned thanks to the initiative of the entrepreneur, profits received under favorable circumstances, unexpectedly allowed and recognized by public authorities (relevant legislation).

All sources are interconnected, and it is often impossible to single out their pure content. The most important factors determining profit are: the introduction of innovations, the absence of fear of risks (risk as a source of profit), the rational use of funds, the achievement of optimal volumes of activity (i.e., the choice of such a scale of the enterprise that allows for optimal profitability). It has been proven that in terms of profits, large enterprises are not always the best). Profit grows as long as the interest rate on bank loans is below the rate of return on invested capital; the presence of debt is thus acceptable, even in many cases it contributes to profit (the so-called leverage effect). Many small and medium enterprises are afraid of debt, which is not always justified. However, using the strategy of voluntary debt, one must be wary of low profitability, because it will force the enterprise to resort to additional loans in order to upgrade the equipment (range). And this can lead to a state of reduced solvency and even bankruptcy.

The introduction of innovations as a source of profit involves the production (sale) of a new product (service) of higher quality, the development of a new market, organizational and managerial innovations, the development of new sources of goods.

The duration of the inflow of profit from the introduction of innovations is determined by the following factors: the importance of the invention, the significance and constancy of the needs satisfied by this product (service), the nature of the activity, the patent and licensing legislation in the country, the introduction of innovations; the overall strategy pursued by the company in the market, the state of the competitive environment in the industry.

There are situations when the role of the entrepreneur in the occurrence of profit or loss is passive. Such situations are generated by: the nature of the activity, the existing market structure, the general economic situation, the presence of inflation (very beneficial for enterprises that have debts and have received non-indexed loans and credits). .

The main factors characterizing the specifics of the activity: capital-labor ratio, cost level, demand dynamics, market structure.