Own funds may appear in financial statements as borrowed funds.
Posted: Thu Jan 23, 2025 6:42 am
The main expense item for companies operating in the service sector is employee salaries. In addition, a lot of money is spent on marketing and advertising - of course, if the owner has chosen this method of promoting the business and finding clients. Management costs generally make up a small percentage of total costs.
It is also worth noting the possible debt on the loan - as a rule, it is a separate expense item for companies that need fixed assets.
It is important to pay attention investor database to how the company divides its expense items into different groups. Enterprises that conduct process activities have a stable and regular flow of financial resources - both receipts and payments. Companies engaged in project activities often cannot boast of such regularity, especially when it comes to cash receipts. And the size of these receipts cannot be called stable. In general, the dynamics of their financial flows differ in different reporting periods.
Sources of financing for companies in the service sector
The volume of work in the reporting period and the amounts of contracts are of great importance in the activities of enterprises. The higher the former, the more financially stable the business becomes.
Financial performance of business in the service sector
Financial indicators give an idea of how the business is developing. For successful operation, the company manager needs to calculate them accurately.
Monthly fixed costs of the enterprise
This is rent, employee wages, utilities - in a word, everything that money will be spent on regardless of whether there is a profit. Next, we will consider a specific example to understand the processes. Let's say the company's monthly expenses are 270 thousand rubles. The manager needs to plan the working model in such a way that the enterprise not only does not go into the red, but also brings in a profit.
Business break-even point
To determine this level, you need to understand what part of the cost of the service will be spent on purchasing, for example, consumables (expenses that depend on the volume of work). Let's assume that 70% of the check is variable costs, that is, out of every 100 thousand rubles received from the client, only 30 thousand can be called gross profit, and 70 will be spent on purchasing materials, equipment, paying piecework wages to employees, etc.
It is also worth noting the possible debt on the loan - as a rule, it is a separate expense item for companies that need fixed assets.
It is important to pay attention investor database to how the company divides its expense items into different groups. Enterprises that conduct process activities have a stable and regular flow of financial resources - both receipts and payments. Companies engaged in project activities often cannot boast of such regularity, especially when it comes to cash receipts. And the size of these receipts cannot be called stable. In general, the dynamics of their financial flows differ in different reporting periods.
Sources of financing for companies in the service sector
The volume of work in the reporting period and the amounts of contracts are of great importance in the activities of enterprises. The higher the former, the more financially stable the business becomes.
Financial performance of business in the service sector
Financial indicators give an idea of how the business is developing. For successful operation, the company manager needs to calculate them accurately.
Monthly fixed costs of the enterprise
This is rent, employee wages, utilities - in a word, everything that money will be spent on regardless of whether there is a profit. Next, we will consider a specific example to understand the processes. Let's say the company's monthly expenses are 270 thousand rubles. The manager needs to plan the working model in such a way that the enterprise not only does not go into the red, but also brings in a profit.
Business break-even point
To determine this level, you need to understand what part of the cost of the service will be spent on purchasing, for example, consumables (expenses that depend on the volume of work). Let's assume that 70% of the check is variable costs, that is, out of every 100 thousand rubles received from the client, only 30 thousand can be called gross profit, and 70 will be spent on purchasing materials, equipment, paying piecework wages to employees, etc.