What is profit in Russia

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

In this article, let's talk about what profit is. Today, in the vast expanses of our great motherland, this concept is quite popular among budding entrepreneurs, economists and just private individuals. Of course, at first glance, each of the members of modern society, in their own opinion, is quite knowledgeable about the issue of earnings. But what is profit in modern economic theory? This concept, like a large number of other terms of economic theory related to the increase in the volume of capital, really only confuses ordinary citizens. So what is profit, really? The concept is a quantitative indicator of the difference between revenue and cost of goods sold. That is, the profit of an entrepreneur engaged in the sale and manufacture of furniture will become a certain calculated value after all the costs of its manufacture are subtracted from the full income from the sale, for example, of a stool.

Types of profits

Although profit is a fairly simple and intuitive term, but, like other system elements,increasing capital, it has certain forms, the source of which is the concept of gross profit - the difference between net income from product sales and cost of goods and services sold, together with operating costs. However, the indicator does not take into account the cost of taxes, fines and other deductions. The difference between gross profit and deductions for taxes, fines and loan rates forms the net profit indicator. What unites them is marginal profit. It does not take into account operating and tax costs, reflecting only the real figures obtained after the sale of products or services, taking into account the costs of their manufacture or provision. Thus forming an indicator of accounting profit.

Shadow economy

However, economic theory and modern practice, especially in the conditions of a market system of value exchange, often do not converge in our country. The moneyless past experienced by our compatriots and citizens of neighboring countries, as well as the already adult conscious and able-bodied generation that grew up in conditions of constant corruption and the absence of any order, made some elements of economic theory incompatible with real accounting at enterprises. This is connected, of course, with almost legal corruption and bureaucratic arbitrariness on the territory of Russia. Since the survival conditions of modern enterprises force their founders and managers to organize their work in such a way that its financial side does not quite reflect the completeness of the rules andlaws of the modern generally accepted financial system. Thus, along with the above indicators of capital replenishment, in our country the most important role is played by an indicator of economic profit unknown in the developed countries of the modern world. It is a numerical expression of the difference between net profit and the cost of bribing officials, the costs associated with extortion, raiding and other popular ways of earning powerful people in our country. That's what profit is in Russia.