What Is Profit Planning?

The profit plan is based on the profit forecast. According to the relevant production and operation plan and cost plan, the target profit to be achieved in the planned period is determined, as well as measures and arrangements to increase revenue and reduce expenditures, and improve profitability. The main contents are as follows: (1) Profit plan for sales of commodities. (2) Total profit plan. (3) Profit distribution plan. (4) Planned profit margin. Including: production value profit margin, sales profit margin, cost profit margin, capital profit margin, etc. Among them, the composition of the industrial company's planned profit can be expressed by the following formula: total planned profit = planned product sales revenue of the product-planned product sales cost-planned product sales tax + planned other sales profit + planned non-operating income . ^[1]

Profit plan

Right!

The profit plan is based on the profit forecast. According to the relevant production and operation plan and cost plan, the target profit to be achieved in the planned period is determined, as well as measures and arrangements to increase revenue and reduce expenditures, and improve profitability. The main contents are as follows: (1) Profit plan for sales of commodities. (2) Total profit plan. (3) Profit distribution plan. (4) Planned profit margin. Including: production value profit margin, sales profit margin, cost profit margin, capital profit margin, etc. Among them, the composition of the industrial company's planned profit can be expressed by the following formula: total planned profit = planned product sales revenue of the product-planned product sales cost-planned product sales tax + planned other sales profit + planned non-operating income . ^[1]

A form of profit management. Written documents that specify the target profit to be achieved within the planning period of an enterprise, as indicated by the planned profit amount and its composition and planned profit rate.
The planned profit amount and planned profit rate are important comprehensive indicators that reflect the economic benefits of the enterprise. It cooperates with relevant indicators in production, labor, materials, costs, and capital plans to form an economic indicator system that reflects the production and operation activities of the enterprise. Correctly compiling the profit plan is of great significance to rationally arrange the production and operation activities of the entire enterprise and improve the economic efficiency of the enterprise. The profit plan of a socialist enterprise is an important basis for the state to plan fiscal revenues and expenditures, prepare a national budget, and plan and guide its production and operation activities.
The composition of the enterprise's planned profit can be expressed by the following formula: In the formula, other sales profits refer to profits obtained from the sale of surplus materials, purchased goods, non-industrial operations and other sales operations; net non-operating income and expenditures refer to The balance of various incomes and expenditures that are not directly related to production and operation activities. There are various calculation methods for the planned profit rate of an enterprise.
In the cost plan and expense plan, if you can provide information about variable costs and fixed costs, you can also first calculate the marginal gross profit of the product sales (sales revenue-variable costs), and then calculate the sales profit (marginal gross profit-fixed costs). Observe the magnitude of the contribution of marginal gross margin to offsetting the fixed expenses and the degree of its impact on total sales profits.