ANALYSIS OF NET REVENUE FROM PRODUCT SALES

Abstract

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 research in the article is the net revenue from product sales.The object of study is explained through the methodology for analysis, which is the subject matter of the study presented in the article. The methodology for analysis is complex system of sequentially implemented interconnected stages. The following stages can be distinguished:1) Information provision of the analysis.2) Analysis of the dynamics of net revenue from product sales for the current versus previous period with a multi-product structure of production.3) Analysis of the average annual dynamics of the net revenue from sales of the production for the analyzed period.4) Analysis of the variation of the actual around the average actual net revenue from sales of the production for the analyzed period.5) Analysis of the dynamics of net revenue from product sales by product group.The author’s objective is to suggest improved methodology for analysis of production net sales revenue. The author presents her vision being well aware that the methodology for analysis of production net sales revenue may be successfully used in the business practice for the management of enterprises and their business both in operating and in strategic aspect.The information obtained from the analysis is useful for the financial management of the enterprise for making the right decisions for its development, for achieving market and financial stability and its good positioning in the competitive market.