Financial indicators of business in Ukraine: income, revenue, profit

In order to determine the financial performance of a business in Ukraine, it is necessary to use various parameters and calculation tools. However, the main financial indicators that are usually distinguished are income, revenue and profit.

The concept of income is broader than the concept of revenue and summarizes all cash receipts of a business, including revenue. Moreover, it includes investments, financial assistance, interest on bank deposits, dividends, etc.

Income reflects the amount of cash flows that come to an individual entrepreneur or organization over a certain period of time. Net income is the funds that remain at the disposal of a sole proprietor or a company after paying all taxes.

Income also plays an important role in financial analysis and planning. It allows you to determine the ability of an entrepreneur or company to reimburse expenses, make investments, and repay debts.

All the money that a sole proprietor or a company has received in the course of its business activities is called revenue. It is a certain amount of money that a company receives from the sale of its goods or services. Revenue is defined as the price value of goods or services multiplied by the number of units sold. Cash in relation to revenue can be either in cash or non-cash. Moreover, if a service or product has been sold and the funds are provided later in accordance with the contract, such funds will still be considered revenue.

This indicator is important for business because it reflects the level of activity of the company and its ability to generate income from its core business. It reflects the total amount of income generated by a company or individual entrepreneur as a result of its activities.

In turn, profit is the difference between income and expenses, i.e. the financial result that remains after deducting all expenses from business revenue. Profit reflects the ability of an enterprise to receive funds after covering all expenses.

To calculate profit, you need to subtract all expenses, such as wages, raw materials, supplies and equipment, depreciation, taxes, and others, from revenue (money received from the sale of goods or services). If the result of this calculation is positive, then we can say that the net profit is positive. If the result is negative, it indicates losses for the business and the need to review the process of conducting its activities. Profit is used to determine a company's financial performance and can be used to calculate various financial indicators, such as profitability (profit to revenue ratio) or cost management efficiency.

It is worth noting that profit is important for a business, as it reflects its ability to ensure profitable operations and affects its financial stability and ability to invest in future development.