Profits and profit enhancement solutions at TOCONTAP sundries import export company

Profits are now considered as one of the most effective economicleverages to strongly stimulate businesses' production and business activities.Profit not only reflects the efficiency of

When it comes to business and production activities, people often mention itseffectiveness Productivity - quality - efficiency is the goal of striving foradvanced production, a measure of qualifications in all aspects of the nationaleconomy as well as for each production unit

A production unit is a cell of the economy in general, the strong development ofeach cell will create the growth of the economy In our country, State-ownedenterprises are the direct creation of material wealth and accumulation of capitalfor society, it plays a key role in the process of building and developing thecountry in line with the socialist orientation means In the current period, ourcountry's economy is in a great transition from the central planning mechanism

to the macro-regulated market mechanism of the State, fully subsidized by theState to produce business So far, these units have to account for profit and lossbusiness, requiring businesses to make great efforts to survive

On the other hand, in the context of fierce competition in the market economybetween enterprises of different economic sectors, enterprises have constantlyaccumulated capital to develop and invest to expand their business This can only

be done when the business operation of the highly efficient business earns a lot

of profits Profits are now considered as one of the most effective economicleverages to strongly stimulate businesses' production and business activities.Profit not only reflects the efficiency of production and business in the marketeconomy condition but it is also an important financial source to carry outreproduction and expand production and business activities and improve thelives of people labor in the business

Stemming from the great role of profitability of production and businessactivities, during the internship at Hanoi grocery import-export company

(TOCONTAP) with the enthusiastic help of teacher Nguyen The Vinh and otherstaffs working in the Accounting and Finance department of my company have

completed the graduation thesis with the topic "Profits and profit enhancement solutions at TOCONTAP Sundries Import Export Company".

Within the time allowed to study and research, my dissertation was completedbut could not avoid the shortcomings and limitations that required furtherresearch Therefore, I look forward to receiving the instruction from the teachers,along with all the readers to help me complete the thesis better

In the course of completing this essay, I was guided by the enthusiastic teacherNguyen The Vinh and the support and facilitation of officials in Hanoi groceryimport-export company (TOCONTAP)

With deep gratitude: I would like to express my sincere thanks to Ms NguyenThe Vinh and the officials of Hanoi Sundries Import Export Company(TOCONTAP) in the past time for helping me with all my heart to complete thisthesis

TABLE OF CONTENTS

LIST OF FIGURES AND TABLES

LIST OF ACRONYMS

Chapter I: General arguments about profitability.

I Profits of an enterprise in a market economy.

1 Enterprise.

1.1 Notion:

An enterprise in a market economy is an economic organization organized to conduct business and production activities in accordance with the law for profit.Depending on the classification criteria, there exist different types of enterprises, according to the form of capital ownership, enterprises are divided into 3 types:

 State enterprises

 Private enterprise

 Mixed ownership business

State-owned enterprises: are economic organizations with capital established by

the State and organized production and business activities to serve the state'ssocio-economic objectives

A private enterprise: is an enterprise established, managed, and solely

responsible by all of its assets with the debts of the enterprise

Mixed-owned enterprise: is an enterprise in which the owner is a collective of

individuals or organizations These members conduct production and businessactivities, share profits and take responsibility for the company's debts as part oftheir capital contribution

This classification specifies the relationship of ownership of capital and assets ofdifferent economic sectors, which is the basis for dividing economic efficiency

by contributed capital and also the basis for the state to prescribe the mainregime Economic policies, development orientations for each type ofenterprises

1.2 Characteristics of businesses in a market economy.

In a market economy, there are many different types of businesses, so there arealso different characteristics However, enterprises generally have the followingcharacteristics:

 All businesses are constantly seeking ways to improve production and business efficiency

 Enterprises are autonomous units in business and financial autonomy

 Business activities of enterprises are governed by the laws of themarket economy such as the law of competition, the law of supply anddemand, the law of value

 All economic benefits of the business are distributed fairly

2 Profit of the enterprise.

2.1 Notion:

- Profits are a quality indicator to evaluate the economic efficiency ofbusinesses in production and business activities That is the final financialresult after a process of conducting business and production of thebusiness

- In the term of trade (The langugue of trade): Profit is the net incomegenerated by the production or sale of goods and services Means theremaining amount for the entrepreneur after paying all capital (interest),land (rent), labor (including administrative costs, wages, wages), rawmaterials crude, taxes and depreciation If the business is poor, profits can

be negative and in that case they turn into losses

- From an enterprise's perspective, profit is essentially the differencebetween revenue and the total cost of production and business that

businesses spend to get that revenue in a given period Accordingly, profit

is determined as follows:

Profit = Revenue - Cost - Tax

- The origin and nature of profit:

The study aimed at elucidating the origin and nature of profits was conducted byeconomists from the early years of the 18th century Although, nearly 200 yearslater, the origin and nature of profits was only K Marx clarified, he was also theone who exposed the exploitative nature of capitalism towards hired workers.Previously the schools of economics and the thinkers of economics hadcontinually studied the origin and nature of profits but could not come up with aclear explanation that profit was being produced from where

The first person to study that profit was Adamsmith, who, according to him,

"Profit is a deduction from the value of products made by workers", the source ofprofit is due to the entire investment capital spawned in both field of productionand circulation

Unlike Adamsmith, David Ricardo said, "Profits are the excess value out of thevalue of goods created by workers always greater than the amount of wages thatworkers are entitled to and the difference is profit" Thus, David Ricardo's ideashave improved more than Adamsmith's arguments, he pointed out that the source

of profits is the "excess value" in addition to the costs paid to workers and theprofits from created by workers, not by all investment capital

In the 19th century, the source of profit was properly understood through theanalysis of K Marx Based on scientific theories and scientific methods, K.Marx pointed out that participating in the process of creating goods value has 3components: immutable capital, variable capital and surplus value residual

 Immutable capital is a part of value that exists in the form of means ofproduction (factories, machines, raw materials, fuels, auxiliary materials,etc.) whose values are preserved and transformed integrity into theproduct, no change in quantity during production (symbolized c).

 Variable capital is the part of capital that exists in the form of laborgenerated and unpaid by workers, in other words, the capital division used

to purchase labor that is not reproduced the value but through the abstractlabor of the employee increases, ie the change in quantity (symbolized v)

 Surplus value is the value of the excess of the value of labor goods created by the employee and taken over by the capitalist (symbolized as m)

From this we find that participating in the creation of surplus value has twoelements: invariant capital and volatile capital If the symbol of the value ofgoods produced in a capitalist enterprise is Gt, then Gt = c + v + m (1) - theactual labor cost of society to produce goods But for the capitalists to hide theirexploitation, they thought that the surplus value was not created by the labor ofthe workers but it was caused by the capital loss created, that is, c and v, c + vcreate From that point of view, capitalists argue that capitalist production costsgenerate profits, not the (v) division that generates surplus value

If the symbol of capitalist production cost is K (K = c + v) then we have thevalue of goods: Gt = K + m (2), from which we have K = Gt-m, that gives seecapitalist production cost is always smaller than the actual cost of society toproduce goods When c + v translates into capitalist production costs, for thecapitalist, the surplus value manifests itself in the increase in the appearance ofcapitalist production costs that the capitalist obtains

The surplus value when compared to the total capital advance is in the form ofprofit If the symbol of profit is p then from (1) and (2) we have Gt = K + p or

the value of capitalist goods production cost + profit The essence of profit is thevalue of the surplus created in production, or the value of the surplus is thecontent inside, is the basis of profit, and profit is the external expression of m.

In fact, in terms of quantity, the basis of p is m but more or less the amount of pdepends on the market price

 When price equals value, p = m

 When the price is greater than the value, then p > m

 When the price is less than the value then p < m

Thus, we can see that p can be greater than or equal to or less than m andregulated by the supply-demand relationship in the market If the supply isgreater than the demand, then the price of goods is smaller than the value ofgoods, so the profit earned by the business is smaller than the surplus value.Conversely, when the supply is smaller than the demand, the price of the goods

is greater than the value of the goods and therefore the profits are greater than thesurpluses

Besides, K Marx also pointed out the conflicting relationship between profit andsalary Lowering wages while constant commodity prices cause profits to riseand vice versa wages to rise while commodity prices do not rise will reduceprofits, indicating an opposition to economic benefits between capitalist andhired workers

Above is the analysis of the origin and nature of profits in the form of capitalistproduction, and under the socialist production base, the profits still retain theorigin and nature? The answer will be: Profits are still generated by thedepartment (v) i.e workers created but different in that: under the capitalistregime, the means of production are capitalist, so the profits are made in the

pocket capitalism in its own way, and under the socialist regime it is based on thepublic ownership of means of production so after paying wages for employeeswill use the profits to supplement the business capital of the enterprise, the restwill be distributed to the fund with the purpose of continuing to maintainproduction and business activities of the business and at the end The same is toserve the interests of workers.

Conclusion: Through the above analysis, we can affirm that the nature of profits

in production and business is surplus value, a form of variation of surplus value the result of unpaid labor, is exploitative relations in the Techmart society Thesource of profit is created by employees, it is the excess value of wages made byemployees Under the capitalist regime, profit is appropriated by the capitalistand shows a contradictory relationship on the economic interests between thecapitalist and the hired labor that creates class conflict in the capitalist society.under the socialist regime, the main benefit is to serve the interests of workers,thanks to which workers will be satisfied with economic benefits and contribute

-to the economic development of the country , building a society of equal andcivilized progress for the prosperous life of workers

2.2 Profit structure.

Each business with each industry, each investment field produces a different type

of profit But overall corporate profits include:

 Profits from business activities

 Profits from financial activities

 Abnormal operating profits

2.2.1 Profits from business activities

Profits from production and business activities are profits earned from the sale ofgoods, services and labor from production and business activities of enterprises.For enterprises engaged in production and business activities, profits earnedfrom production and business activities constitute the largest proportion of thetotal profits achieved by enterprises It is a prerequisite condition for businesses

to accumulate to serve the expansion of reproduction, and it is also a prerequisitecondition for businesses to set up job loss support funds, reward funds,

Therefore, profits from production and business activities are crucial to theexistence and development of enterprises

Profits from production and business activities include profits from majorproduction and business activities and profits from specific auxiliary productionand business activities:

- Profits from main business activities:

Profits earned from the main business activities are formed from performing themain functions and tasks of the enterprise, which are stated in the decision toestablish the enterprise and stated in the business registration certificate.business This profit constitutes a large proportion of the total profit of theenterprise, and this is also an indicator reflecting the proper implementation offunctions and tasks set out by the business

Profits from the main business activities are determined as the difference between the revenue from the main business activities and the expenses from the main business activities.

- Profits from side business activities:

Profits earned from activities conducted outside the main functions and duties ofthe enterprise, supporting the main business operations of the enterprise and

making the most of its resources, raising the efficiency of the enterprise usecapital, labor and technical materials, machinery and equipment.

Profits earned from the subsidiary business is the difference between the revenuefrom the subsidiary business and the expenses allocated to that subsidiarybusiness

Profits from the secondary business, although not accounting for a largeproportion of the total profit, it affects the increase and decrease of the totalprofit that the enterprise earns and also shows the thorough utilization ofopportunities business, diversify opportunities for profit, minimize risks fromunpredictable changes from the business environment of the business

- Methods of determining profits from production and business

activities of enterprises:

We have the formula to determine the profit of production and business activities

as follows:

Profit = Revenue - Cost

 Revenue from production and business activities:

All revenues from the sale of goods, services and services during the period.Which includes:

+ Turnover from the main production and business activities: is the proceedsfrom the main production and business activities of the enterprises recorded inthe business licenses of the enterprises

+ Turnover from auxiliary production and business activities: is an extra chargeoutside the main production and business activities of the enterprise in order toexploit and make the most of available resources in the enterprise

 Sales deductions include:

+ Discount on goods sold: is the amount accepted by the enterprise to the buyer

in case the goods are of poor quality or of poor quality according to the contract,the buyer requests a discount Or because buyers buy in bulk and get discountsfrom businesses Therefore, reducing the price of goods can accelerate the sale ofgoods and recover capital quickly However, it is also possible that the sale price

is reduced due to poor quality If the sale price is greatly reduced, the net revenue

of the enterprise will decrease and this will lead to a decrease in the total profit

of the enterprise

+Returned goods: Reflecting the value of the sold goods (turnover has beendetermined) but the buyer refuses to return them due to the poor quality of goods

or the wrong quality as agreed in the contract …

+ Indirect taxes at the stage of consumption: Depending on the differentcategories of goods and businesses, businesses are subject to different indirecttaxes Indirect taxes at the consumption stage include:

 Export tax

 Special excise tax (if applicable)

 VAT paid by enterprises that pay VAT by the direct method and inputVAT that has not been deducted for businesses that pay VAT by thededuction method

+Cost of goods sold:

Is an important factor directly affecting the profits that businesses earn The cost

of goods sold depends on the different types of businesses, which are determineddifferently

 For commercial enterprises, the cost of goods sold is the cost of

buying goods for consumption in the period, including:

 Purchase price of goods consumed in the period

 Expenses incurred during the purchase process such astransportation, loading and unloading, packaging costs allocated

to goods consumed in the period

 For production and business enterprises, the cost of goods sold is theproduction cost of products, labor, services and consumption in the period,including:

 The cost of materials directly

 Direct labor costs

 Workshop management costs.

 Selling expenses:

This is an expense incurred in the process of selling products, goods, services Including salaries and allowances paid to salespeople, costs of packaging

materials, preservation and transport goods Depreciation expense of fixed

assets, tools, tools, utensils for sales There are also other costs such as

advertising costs, marketing, market surveys, warranties, commissions

 Enterprise Cost Management:

All costs of living and materialized labor arising in the course of enterprisemanagement, administrative management and other general expenses of thewhole enterprise are expressed in cash

Enterprise management expenses include: Expenses for enterprise managementstaff, expenses for materials used in management, expenses for office equipmentand depreciation of fixed assets There are also costs: taxes and fees, contingencycosts, outside service costs, and other cash costs

2.2.2 Profit from financial activities.

It is the profit gained from the financial investment activities of the enterprise,the capital investment outside the enterprise such as: capital contribution to jointventures, business associates, capital contributions, activities of buying andselling bills, bonds , stocks, asset leasing, real estate trading, interest on depositsand loans from business capital and funds, foreign currency trading Currently,the development trend of the stock market where the main financial investmentactivities of enterprises is mainly securities investment due to the flexibility incapital conversion of the stock market and the ability to earn profits high fromthis investment

Financial income is the difference between income and expenses of financialactivities

Profits from financial activities are determined as follows:

 Revenue from financial activities: is the income from financial

investment

activities: joint venture, associate, securities trading, interest from bank deposits, exchange rate differences, Reversal of financial reserve fund

 Expenses of financial activities: including expenses for participation

in joint ventures, associates, selling securities, loan brokerage expenses,expenses due to foreign currency exchange differences, interest paymentexpenses, expenses Financial provision

2.2.3 Abnormal operating profits

It is the profit earned by an enterprise from irregular business activities, which isnot anticipated or expected but is not feasible These profits are earned bysubjective or objective reasons

The abnormal operating profit is determined as follows:

 Revenue from unusual activities: is the income from irregular,unforeseen or unlikely business activities of the enterprise, including itemssuch as: Liquidation of assets, transfer of fixed assets sold out of use, baddebts recovered, now collected, compensation paid by the partner forbreach of contract, omitted incomes

 Unusual expenses: are expenses incurred by the enterprise which are not

anticipated by the enterprises, including: Expenses for liquidation, sale offixed assets which have expired, the amount of money fined forcompensation contracts and retrospective collection of taxes, assets lack ofunidentified causes, omitted expenses

From the methods of determining the profit of the enterprise, we have theformula to determine the total profit of the enterprise as follows:

Total profit = Total revenue - Total cost

Thus, it can be seen that due to different industries and business sectors, there is

a difference in the proportion of profit of each profit division in the total profit ofthe enterprise On the other hand, depending on each enterprise, each stage andperiod of business, the profit structure of the enterprise may include 3 or 4 parts

of profit that the enterprise has achieved in the period

Studying profit structure is important for each enterprise so that the enterprisecan take appropriate measures to adjust and improve profits from its financialactivities to suit its function and tasks of enterprises, at the same time overcomeweaknesses and limitations that exist in production and business activities ofenterprises, promote positive aspects to obtain the highest profits

2.3 Profit margin.

Notion: Profit margin are relative indicators that allow business and production

efficiency to be compared between different periods in an enterprise or betweenenterprises in the same period

Based on the profit margin, people evaluate the effectiveness of the businessproduction The higher the profit rate, the greater the business efficiency and viceversa

The determination of profit rate also has many different ways, each carrying adifferent economic content depending on the business, the business that uses theprofit margin accordingly We can consider some common profit margins:

2.3.1 Return on sales:

2.3.2 Return on capital:

2.3.3 Return on cost:

2.4 The role of profit.

In terms of business accounting in the market mechanism, whether the businessexists and grows depends on whether the business operates effectively or not,can it generate profits? This shows that profitability is very important for theexistence and development of businesses

In a market economy, there are many individuals, organizations and enterprisesdoing business and production activities, in which production and businessactivities of enterprises play a key role in creating the overall development of theeconomy The country, the existence and development of businesses is alsocreating income for the state and for workers So profit also plays a role with thestate, with workers Specifically, the role of profit is shown in the followingpoints:

 The role of profitability for the business:

 Profit plays an important role in the production and business activities

of the enterprise, both being a target, both a motivation and a condition ofexistence and development of the business

The operation of an enterprise in a market economy, although each stagehas different goals and tasks But finally, the specific goals and tasks thatthe business set out in each period only serve its ultimate purpose ofgenerating profit

The free market economy operates within the framework of the provisions

of law, self-accounting for revenues and expenditures, and interestsbearing profits Therefore, profit is both a goal and a motivation and acondition of existence of the business Without profit, businesses will nothave capital to organize business activities for profit-making purposes aswell as to maximize profits It is also for profit that businesses constantlyexpand and enhance their production and business activities to meet themarket demand to win in competition Only a profitable business can theenterprise have a physical premise to preserve and develop businesscapital, expand the business scale, or in other words to survive anddevelop

 Profits are a basic economic indicator to evaluate the production and business efficiency of enterprises

Profits are general economic indicators reflecting the entire businessprocess of an enterprise, affecting all aspects of the production andbusiness process, which is the difference between the revenue earned bythe enterprise and the expenses to get those revenues.

The larger the difference between these two economic indicators, the moreeffective and profitable the business is This reflects that the businessoperation has met the requirement of self-accounting and subtractingincome from expenses

In contrast, the smaller the profit target and the negative tendencyindicates that the enterprise is in a state of ineffective operation, therevenue is not enough to cover expenses, the goods are not sold out andremain stagnant in the warehouse This shows that the current businessdoes not meet the needs of consumers for goods and services Therefore,when considering profit as a general economic indicator reflecting theefficiency of the production and business process of the enterprise, it isrequired that the business planning business plan must set out themeasures to best meet the needs of customers, increase sales and takemeasures to lower production and business costs

 Profits are an important source of accumulation to help businessesinvest in depth to expand the scale of production and business, which is acondition to strengthen the strength and reputation of businesses in themarketplace

Indeed, after the enterprise has fulfilled its obligations to contribute to theState Budget and distributed to entities participating in the joint venture, the rest will be distributed to such funds as the first fund investment andbusiness development, financial reserve fund, these funds are used toinvest in expanding production and business activities, changingequipment and machinery, researching new and suitable technologyequipment rationalize production with market demand, so thatbusinesses can be more financially autonomous, easily invest in depth toimprove labor productivity, paving the way for improving profits of thebusiness

 Profits affect all business activities of the enterprise, affecting thebusiness capital and financial situation for the production and businessactivities of the enterprise

When the business operation of an enterprise is effective, it means that theenterprise is a profitable enterprise, which shows that not only can the

business preserve its capital but also have an additional profit to thesource business capital of the enterprise In the context of fiercelycompetitive market economy, capital which is very important allowsbusinesses to carry out large-scale projects, invest in research, innovationand perfect production and business technology, improving reputation isthe competitiveness of enterprises in the market Thus profit is animportant condition to ensure a stable financial situation of the business.

 For investors and employees:

For investors involved in business activities on the market, the profit for them

is a dream, a desire and a desire to achieve For employees working inenterprises, the profits are associated with and directly affect their interests,with them profits increase their incomes and improve their lives, increasetheir economic benefits When workers are adequately paid, they will beassured of working, promoting the spirit of creative, responsible and whole-hearted work for the work and thus increasing the overall labor productivity

of Employees in the company make the company's operations better andbetter

 For the State:

 Profits contribute to increasing the state budget revenue and improving social welfare

For the state, businesses and business entities in the economy will makesignificant contributions to the State's revenue through the fulfillment of theobligation to pay taxes to the State Budget, such as: : corporate income tax,excise tax

Through the fulfillment of its obligations to the State Budget, the State cancarry out activities of investment in national economic development andsocial justice Within the whole national economy, profit is the basicaccumulation source to reproduce and expand the national economy, buildinfrastructure, build social welfare works, and establishing, renovating andexpanding production and business establishments, creating job securitypolice, increasing income for laborers, raising people's intellectual standards,building a society of modern and civilized justice

 Profits are the driving force for the development of the national

economy

The national economy consists of many business entities, of which themajority are enterprises and therefore the development of the enterprisesystem that creates profit development is the goal , being the driving force,the basis of existence and development, for the State, profit is also the drivingforce for developing the national economy.

 Profits are one of the measures reflecting the effectiveness of theState's macro management policies on production and business activities

of enterprises

Proper and open macroeconomic policies of the State will create favorableconditions for businesses to develop better, thus enabling businesses toimprove their operating profits On the contrary, if micro policies are notsuitable, negatively impacting on the operation of enterprises, it will hinderthe development of enterprises and adversely affect the profits that enterprisesgain

In short, profit is both a goal and a motivation, a condition of existence and development of businesses, thanks to profits, businesses expand production and business scale, invest in equipment innovation improve and improve product quality, create capital and solid financial capacity for production and business activities Profits contribute to bringing income to improve life and reproduce the labor power of workers, create employment police, solve unemployment Profits are also a source of revenue for the State budget, creating a basic source of accumulation to reproduce and expand the national economy With such importance, businesses are always looking for ways to improve profits and maximize profits.

II Measures to improve profits in the business.

1 The meaning of improving the profitability of the business.

Stemming from the important role of profits, both as a goal and a motivation, aswell as the conditions of existence and development of enterprises, it isnecessary and objective for the improvement of profits every business in amarket economy If the business does not make a profit, it means that therevenues of the business are not enough to offset the costs themselves, whichmeans that the business is on track to make a loss and If this situation persists,businesses will inevitably go bankrupt This shows that only when businesses areprofitable, they will allow businesses to exist and develop

In fact, when the economy was governed by the centralized system of subsidies,the State was responsible for the entire production and business process ofenterprises profit or loss does not affect the business This is one of the reasonsleading to businesses in this period in particular and our economy in generaloperating inefficient, poor productivity, stagnant production, worker’s lives arenot guaranteed.

When our country's economy is transformed into a state-owned marketmechanism that is managed only on a macro scale, businesses must beindependent, proactive and self-responsible for their business results Moreover,

in the economy with the participation of many businesses, the competition isvery fierce in the market The law of competition is very harsh only to acceptbusinesses that make profits and eliminate businesses that make losses, puttingbusinesses before the challenge of survival and development, they must meet theprofit targets

Improving profits of production and business activities of enterprises also meansimproving financial capacity to meet the capital needs for business activities ofenterprises, investing in expanding production and business, and exchangingnew technology equipment, product innovation, improve product quality andbetter meet customer needs, enhance competitiveness, strengthen the strengthand reputation of businesses in the market

Profits also mean creating income sources and raising incomes for workers,improving the lives of workers, creating job security and solving unemployment.Improving profits also means raising revenues for the State budget, improvingsocial welfare, and contributing to creating a driving force for the development

of the country's economy

Stemming from these important meanings shows that raising profits is not onlydecisive for businesses but also for the State, for employees, and thedevelopment of the economy citizen

2 Factors affecting the profitability of the business.

There are many factors that affect the profitability of the business, includingthose that are outside the control of the business, and those that are under thecontrol of the business, namely the following affect the profitability of thebusiness

2.1 The objective factors:

These are factors that are outside the subjective will of the enterprise, usuallythose are elements of the business environment where the enterprise is not able

to influence but can only adapt to changes from those environment aspects:

 Changes in the natural geographical environment, such as naturaldisasters, floods, fires, earthquakes, ., changes from the naturalenvironment make businesses unforeseen, sometimes causing damage toproduction and business activities of enterprises, affecting profits earned

to develop, while on the contrary, it will inhibit the development ofenterprises will have difficulties in meeting their profit targets

 A change in the nation's political institutions: is also a factor outsidethe control of the business In a country where there is political turmoil,the risk of doing business of that business in that country will be seriouslythreatened, moreover, changes in the nation's political institutions willimpact to changing the legal system from that country sometimes leads tothe risk of expropriation of that national government So that greatlyaffects the profits the business will achieve

 A country's changing economic environment The trend of thecountry's economy falling into recession, stagnant economyunderdeveloped

made businesses have to cut their operations and thus risk reducing theprofits of enterprises.On the other hand, many economies have highinflation, the depreciation of the domestic currency makes the real value ofenterprises' profits decrease and many businesses fall into real losses

 Changes in market and competitive environment of enterprises:

The market directly affects the operation and profitability of the businessbecause the market is the place to provide inputs for businesses, and alsowhere businesses will absorb their goods Therefore, when marketfluctuations can lead to market expansion or contraction, the consumption

of goods and services of the enterprise may be reduced, or may bereduced The increase will affect the revenue and profit that the businesswill gain.

The entry or withdrawal of competitors in the market creates a two-wayimpact on the operation of the business When there are many competitorsparticipating in the market in which the business is operating, thecompetition is increasingly fierce, leading to the risk that the market of theenterprise may be narrowed and therefore may reduce the profitability ofthe business

 Price fluctuations in the market: It is also an objective factor affectingthe profitability of businesses Price affects the consumption of goods inthe period that the business makes, so it will affect the revenue it earns andits profit because the profit is determined by Total revenue less businessexpenses allocated during the period

Nowadays, as the trend of globalization of the economy is growing,businesses' operations are directed to global scale, changes from theinternational business environment will affect profits These factorsinclude: regional economic and financial volatility, with the typical 1997Asian financial crisis as a specific example, relationship amonggovernments, fluctuations in exchange rates are the factors that affectthe profitability of businesses when they conduct business activitiesbeyond the borders

2.2 The subjective factors:

In addition to the above objective factors, subjective factors that greatly affect the profitability of the business are:

 Human factor: It can be said that people play a central role and have a direct impact on the business results of the business

Human factor in the enterprise is the human resource of the business orthat is the staff of the enterprise With professional qualifications,management skills, and job proficiency of the employees is the maindeterminant of profitability for the business Management skills, agility,flexibility in organizing and performing the work of leaders and the sense

of responsibility of all employees in the company will contribute toincreasing work efficiency, from That facilitates to improve profits forbusinesses

 Financial capability of enterprises: Financial capability is an importantcondition for businesses to develop, it allows businesses to have capital tocarry out large-scale business projects, open investment expandingproduction, renewing technological equipment, improving product quality Moreover, with solid financial capacity, enterprises will be more active

in production and business activities as well as gain proactive position inmarket competition

 The organization and management of production and business

activities in enterprises

Demonstrate in a reasonable arrangement of work for each employee toensure that they have the ability to promote their own personal capacityand complete the assigned tasks Arranging the organizational structure ofthe business operation in accordance with the actual situation andrequirements of the company, creating a close coordination amongdepartments, linking into a unified system of operation from the top down.The bottom line makes the production and business process of thebusiness run smoothly and efficiently, increasing revenue and cuttingunnecessary expenses, thereby increasing profits for the enterprise.Conversely, if the organization and management of production andbusiness activities of an enterprise are not good, it will adversely affect thebusiness results of the enterprise and reduce the profitability of thebusiness

 Structure of business items of the business: The structure of businessitems affects the consumption of goods of the enterprise thereby affectingthe profitability of the business A reasonable commodity structure withthe appropriate type and density of each good product will avoidstagnation due to stockpiles too large for market demand With areasonable structure of business items, in accordance with the needs of themarket and allowing to exploit the strengths of the business to facilitatethe sale of goods and services of the business, it is inevitable to do.increase profits of the business

 Quality of goods and services of the business: The quality of goodsand services directly affects whether or not the customer accepts andpurchases the Company's products and products on the market Therefore,the quality of goods and services will affect the profit earned by thebusiness Therefore, in order to improve profitability targets, enterprisesneed to improve designs, diversify products and goods, improve goodsquality

 In addition to the above subjective factors, there are many factors thataffect the profitability of the business such as payment methods andservice modes, sources of goods and quality of input sources The factorsthat businesses can control, so businesses need to have a plan to controlthese factors and consider the degree of influence of each factor on profits

so that measures can be taken positively and eliminate negative impacts toincrease profits of the business

2.3 Factors affecting the export and import profits of enterprises:

Researching the factors that affect the level of foreign trade profits allows us toexplore objective and subjective reasons to find ways to increase export andimport business profits Factors that directly affect the profit of foreign trade:

 The flow of import and export goods:

If the prescribed profit flow for each goods sold is a fixed number, if theincrease in sales of goods sold, the import-export unit will gain more absoluteprofits and vice versa In practice, many import and export units fail to realizetheir profit plan due to the failure to implement the plan for export and importgoods Therefore, expanding and increasing the speed of goods circulationwill increase the profitability of the business unit

 Structure of import and export goods:

Each type of import and export goods has its own profit level depending onmany business factors: the level of competition in the market, business costs,import and export taxes are very different So, when the structure ofbusiness goods changes, the overall profit level of the company will becompletely changed, but if the profit margin by the different ways ofcalculation also changes: If the commodity trading has high interest ratesaccounting for a high proportion in the whole structure of import and exportgoods, respectively, will increase the foreign trade profit and vice versa

 Price factor:

 Price of goods: the price of buying goods and selling prices of

imported and exported goods directly affect the profits of foreign tradeunits If the purchase price is too high, sold at market prices, then the grossprofit (the difference between the selling price and the buying price)decreases and profits fall And conversely, if the buying price drops, thegross profit will be large and the profit will be large If you want to reducethe price of the

purchase, make the original purchase, make a comparison of the sellingprice of import suppliers to choose cheap supply of imports (of course, thequality of the purchase).

Market valuation also has a direct effect on foreign trade profits.Normally, the prices are high in the absence of competition in the market,

if the profits are in the form of high monopoly profits, but the prices arehigh in the market with fierce competition, the purchasing power is high.Low solvency of goods consumed slowly, profits will decrease

Therefore, in the context of market mechanism, the businessmen musthave a firm grasp of the market in order to set up an appropriatecommodity price policy whose ultimate goal is to boost sales, dominatethe market and increase the absolute profit for business

 Cost of circulation costs: As mentioned above, foreign trade profits

are earned after gross profit less costs and taxes As a result, thecirculation costs are high, even though the gross profit is large, the foreigntrade profit will also decrease So the price of transportation costs increase

or decrease also directly affect the cost of circulation and profit

 Exchange rate: In fact, in the payment of import and export goods,

Vietnamese enterprises participated in the use of strong foreign currencies.but the purchasing power of these currencies is not stable but can change

or decrease compared to Vietnam dong Therefore, it will directly affectthe profitability of import and export businesses If other factors do notincrease or decrease when foreign currency prices rise against theVietnamese currency, it will facilitate export business more effectively andthe benefits of import activities will decrease and vice versa Therefore,for enterprises, although the increase and decrease of exchange rate is anobjective factor, the close monitoring of the exchange rate situationchanges in order to timely propose measures to adjust their businessactivities effects to increase profits for his import-export company

 Tax: Depending on the business results, taxes are the obligations that

import and export business units have to pay to the State The tax ratedirectly affects the foreign trade profit of the enterprise

 Other factors: Such as minimizing the amount of fines and

compensation for not fulfilling economic commitments, reducing theamount of goods lost, loss in all business stages, choosing the appropriateform of payment

also contribute to increased profitability

3 Measures to improve the profitability of the business.

From the formula:

Total profit = Total revenue - Total cost

We see that in order to improve the profitability of the business, we must takemeasures to increase sales and take measures to lower costs, the following arespecific measures:

3.1 Measures to increase the revenue of the business:

There are many measures to increase the turnover of an enterprise, depending onthe characteristics and business fields of each enterprise, which can be selected

to suit the actual situation of the business However, the requirement of themeasures to increase revenue requires the enterprise to implement such acombination of measures to achieve an overall effect

 Develop business strategies and plans properly and in accordance with the actual situation of the business.

The right business strategy and plan allows the business to shape thedirection the business will reach in the future, which will indicate thegoals that the business needs to take to achieve the set goals enterprise.When appropriate business strategies and plans allow businesses to makethe most of resources for production and business, this will increase theperformance of the business, contributing to increased profits

 Developing and implementing marketing plans and policies, promoting market exploitation research to understand customers' needs.

The implementation and implementation of marketing plans and policies:product policies, pricing policies, promotion policies, distribution policies together with promoting market exploitation research and understandingcustomers' needs allowing to meet well the needs of consumers,contributing to increasing the performance of enterprises

+ With product policy: focusing on improving the quality of goods and

services, diversifying forms and models, organizing the good exploitation

of goods sources, organizing the stockpiling of goods to be ready tosupply when the market needs

+With the price policy: Need to determine a reasonable price to be able to

increase consumption volume while ensuring profit

+ With promotion policy: Need to use measures such as advertising,

promotion to customers and consumers to increase sales

+ With the distribution policy: Need to select the location, build stores,

warehouses and factories and arrange distribution network so that goodscan be delivered to customers as quickly as possible, at the same time Thedistribution network in the area allows the supply of goods and products inlarge quantities

 Well organizing business processes of products, goods and services of the company.

The well-organized process of trading of products and services requiresthe Company to perform well in all stages: input supply, to input, tostockpile, to consumption goods, payment organization perform wellthe above stages to allow businesses to meet customers' needs, increasesales, cut unreasonable expenses in the above process and thus increasethe profitability of the business

 Selecting a reasonable structure of business items.

The structure of the company's business items affects the consumption ofgoods and services by the business Therefore, in order to increase theprofitability of the business, the enterprise needs to choose an appropriatebusiness item structure both in quantity and proportion of goods in thestructure, and how that structure is structured Must promote the strengths

of the business, attract customers to the business Selecting a suitablebusiness item structure suitable to the segment of the consumer marketthat the business has analyzed and the implementation of a marketingpromotion plan to attract customers will bring success to the business

 Organize and select appropriate sales methods, convenient payment methods, and improve the quality of after-sales service.

+ Method of sale: including wholesale or retail depending on the type of

business that business But choosing the right selling method will promotethe consumption of goods and services of the business

+ Payment method: quick convenience for buyers will contribute to

encourage customers to buy goods from the business, reduce bad debts,thus increasing the profits of the business

+After-sale services such as: installation and repair services, user manuals

convenience and quality contribute to attracting a large number ofcustomers to businesses and increase the volume of products and goodsconsumption, increase sales and profits achieved by the business

3.2 Measures to reduce costs of businesses:

In the course of operation, businesses must spend a lot of expenses to serve theirproduction and business activities such as expenses for materials, wages forworkers, and wear and tear of equipment hooks, transportation costs, storagecosts, marketing costs, advertising costs These costs directly affect the profits

of the business Therefore, businesses need to pay attention to cost managementbecause unreasonable and improper costs will reduce the efficiency achieved bybusinesses Reducing costs to improve profits does not mean cutting costsarbitrarily because doing so would be counterproductive because the revenue isalways commensurate with the expenses that businesses spend Therefore, theessence of cost reduction measures is good management of expenses, avoidingwastefulness, loss of costs, and eliminating unreasonable expenses Specifically,the following are measures to lower the cost of the business

 Strengthening cost management: By planning and calculating the costs

that businesses will have to spend in the period Develop and launch asense of cost savings for all employees in the enterprise Use material aswell as mental incentives to encourage people in the company to savebusiness costs, to encourage everyone's initiatives to reduce costs Inaddition to saving costs, it is also necessary to use some tough measuressuch as discipline for cases of cost loss or fraudulent expense declarationfraud Need to regularly check and supervising cost declarationdocuments, taking resolute measures, not accepting expenses without validdocuments and exceeding the State's regulations

 Well-organized division of labor in the enterprise: is an important

factor to improve productivity as well as labor efficiency, contributing tothe increase of overall efficiency of the business The rational and rationaldivision of labor in the enterprise will contribute to the use andexploitation of the production and business resources of the enterprise,eliminating the waste of labor and machinery, and promote the short-termcompetence of each employee in the company, promote the sense ofresponsibility of everyone in the job, create a dynamic workingenvironment in the company and achieve quality productivity Highcontribution to reduce product costs and increase profits for businesses

 Organizing well exploitation of goods sources and input sources for enterprises.

Input source and input quality for the business are very important because: