What Is a Corporate Profit?

Corporate profit refers to the financial results of an enterprise's production and operation in a certain period of time, which is equal to the difference between the total revenue from the sale of products and the total cost of producing goods. Including operating profit, investment income and net non-operating income and expenditure. It refers to the general term of industrial profit and commercial profit in the presence of interest. It is the difference between average profit and interest in quantity.

Corporate profits

Corporate profit refers to the production and operation of an enterprise within a certain period of time.

1. The average profit obtained by the functional capital using the borrowed capital to operate, the balance after deducting interest is called corporate profit;

2. Enterprise profit is a part of average profit and a special conversion form of surplus value;

3. From a social perspective, corporate profits are the remuneration of functional capitalists, and interest is generated by the capital itself.

The operating profit of an enterprise is the operating income minus

There are four main factors affecting corporate profits:

Product price

Unit variable cost of product

Product sales

Fixed cost of product

Changes in any of these factors will cause changes in corporate profits, and even cause an enterprise to change from profit to loss, and will also turn an enterprise into profit. So how do you know the key factors that affect corporate profits? How corporate decision makers make correct decisions in a drastically changing environment. With the help of sensitivity analysis, corporate managers can have a clear understanding of such issues.

Economic benefit is the proportional relationship between an enterprise's total production value and production cost, which is expressed by a formula:

Economic Benefit = Gross Production Value / Production Cost

Corporate profit refers to the difference between the total production value and the production cost, which is expressed by the formula:

Profit = Gross Production Value-Production Cost

Does an increase (or decrease) in corporate profits mean

Types of corporate profits:

1.

Impact of key taxes

China's implementation of the reform of value-added tax reform can reduce the burden on enterprises in the short term and increase their investment enthusiasm. It can stimulate investment and expand domestic demand in the long run. In conjunction with the structural transformation of the market economy, it has an important role in revitalizing the economy and public confidence. The indicators have an impact. Under the same conditions of production and operation, enterprises can reduce the amount of tax payment and the debt service burden, and improve the competitiveness and profitability of the entire industry. There are various preferential tax policies for business tax. The taxable items cover almost the entire tertiary industry. Each tax item has specific taxable details and tax rate differences. Corporate financial staff need to analyze their taxonomy notes in detail for their own business, and effectively divide the accounting between different tax items. Operating activities between different tax rates, between internal and external labor services, and between tax reductions, exemptions and levies are of great significance for reducing tax burdens, reducing unnecessary taxes and expenses, and increasing profits. Income tax, as the second largest tax in the current tax system, plays an increasingly important role in national taxation. It is an important tool for the state to regulate economic operations and adjust income distribution. The new corporate income tax law and preferential tax policies that "combined the two taxes" are in the "simple tax system, Under the tax reform concept of wide tax base, low tax rate, strict tax collection and management, the progress of the tax legal system has been continuously promoted, and the differences between old tax laws and how to connect them have played an important role in promoting the growth of corporate profits and exploring new tax planning methods.

The purpose of business operation is to maximize profit, and profit is not only the basic guarantee of business development, but also an important indicator of business performance, which determines that the company will inevitably find ways to reduce costs and obtain higher profits. Corporate tax accounting through a variety of tax planning through prior planning, reasonable arrangements for company financing, investment, operation, profit distribution and other financial activities, reasonable decisions on procurement, production and operation and internal accounting, etc., using national regulations to actively tax planning, both to ensure The fulfillment of profit and tax obligations of enterprises increases their "blood-making" capabilities, reduces tax burden, and increases their after-tax profits to achieve their sustainable and healthy development. ERP products and the national tax-related system for information transmission and element continuation, business processing of many taxes (value-added tax, income tax, business tax, consumption tax, tariff, export tax rebate, etc.) involved in the business process of the enterprise, which can accurately account for various taxes Tax reporting, improve the work efficiency of fiscal and taxation personnel, and also evaluate corporate accounting, bills, operations, accounting, and taxation, better help companies to properly implement national tax policies, conduct overall business planning, and prevent tax risks for enterprises Management decisions and suggestions provide a solid foundation for profitability. ^[2]