THE SYSTEM OF RETURN ON SALES RATIOS OF HOSPITALITY INDUSTRIES’ COMPANY: CALCULATION OF FINANCIAL STATEMENT AND MODERN ANALYSIS TRENDS

Abstract

The article systematizes the existing methodological approaches to calculating the profitability ratios of sales (rate of return on sales) on the open financial statements in accordance with the Ukrainian NP(S)ofA. The ability to conduct analysis of sales policy and cost management of open financial statements is very important for interested outside observers (for example, lenders and investors). Improving approaches to calculating and analyzing various variants of sales profitability ratios (revenues, incomes) is an important element in increasing the effectiveness of managerial decision-making. The most correct is the formation of profitability ratios of sales (revenue, income), taking into account the principle of correspondence to profits (numerator of the profitability formula) and sales (revenue, income) associated with its generation (denominator of the formula). However, in the practice of domestic and international analysis, simplified formulas for profitability of sales (revenue, income) are used, in which this principle is not observed. The analytical capabilities of various options for calculating the profitability of sales (revenue, income), their correlation with foreign practice of financial analysis are clarified. Each version of the sales profitability formula (revenue, income) has its own specifics that must be considered when choosing the most relevant calculation methodology for the purposes of the study. For example, the Gross Profit Margin reflects the success of exclusively sales of products (goods, works, services), excluding other operating and non-operating income. And the Net Profit Margin depends on the accounting policy of the enterprise, the value of financial leverage, the value of fixed assets, long-term expenses (for example, on investments and innovations), etc. A comparative analysis of the rate of return on sales of the hotel and restaurant business, taking into account their industry specifics. Practical recommendations have been developed regarding the choice of a specific form of the sales profitability index (revenue, income), taking into account the objectives of financial analysis.