A METHODOLOGY FOR ANALYSIS OF PRODUCTION NET SALES REVENUE WITH REGARD TO THE SALES PROFITABILITY AND THE ENTERPRISE’S LEVEL OF BUSINESS RISK

This publication highlights the methodology for analysis of production net sales revenue. It consistently presents an analysis of the deviation of production net sales revenue for the current period versus the previous period. This deviation is subject to the influence of three direct factors: 1) Changes in the natural volume of sold products. 2) Changes in the product range structure of sold products. 3) Changes in the net sales price of products. The impact of these direct factors may be established both in absolute and in relative terms. For this purpose, the author uses different elements of the method of the financial and business analysis: methods of comparison, adjustment of indicators, subsequent substitution, index method, etc. Analysis is made for the dynamics of production net sales revenue for more years in a row, by identifying both their average dynamics and the variation for the whole period of time. To this end, the author has used the dispersion analysis. The object of this article refers to the production net sales revenue with regard to the sales profitability and the enterprise’s level of business risk. The object of study is explained through the methodology for analysis, which is the subject matter of the study presented in the article. The author’s objective is to suggest improved methodology for analysis of production net sales revenue, profitability of sales and level of business risk for the enterprise. The author presents her vision being well aware that the methodology for analysis of production net sales revenue with regard to their effectiveness (sales profitability) and the level of business risk may be successfully used in the business practice for the management of enterprises and their business both in operating and in strategic aspect. In order to achieve the objective of the study, the following research tasks have been defined: 1) To carry out analysis of the dynamics of production net sales revenue for the analysed time period. 2) To analyse the average annual dynamics of production net sales revenue for the analysed period of 4 years. 3) To carry out analysis of the variation of production net sales revenue. 4) To analyse the sales profitability.