Vovk Olha, PhD (Economics), Associate Professor, Associate Professor at the Department of Air Transport Economics, National Aviation University, Kyiv, Ukraine

ORCID ID: 0000-0002-1680-1959
e-mail: economy.nau@gmail.com

Kovalchuk Alona, Senior Lecturer, Department of Air Transport Economics, National Aviation University,  Kyiv, Ukraine

ORCID ID: 0000-0002-9059-8303
e-mail: alenam9697@gmail.com

Komisarenko Yana, Applicant for Higher Education Faculty of Economics and Business Administration Administration, National Aviation University, Kyiv, Ukraine

ORCID ID: 0000-0002-8396-3368
e-mail: yana.komisar22@ukr.net

Dzhulai Alevtyna, Applicant for Higher Education Faculty of Economics and Business Administration Administration, National Aviation University, Kyiv, Ukraine

ORCID ID: 0000-0002-8812-108X
e-mail: adzhulay1@gmail.com

Profit and Profitability as Determinants of Enterprises Development

Abstract. Introduction. In the modern economy, profit is one of the driving forces not only of the enterprise but also of the development of the State. The main purpose of any domestic business is to make a profit and achieve profitability. Research into these determinants of management decision-making therefore remains relevant.

Purpose. The aim of the study is to characterize the role and conditions (determinants) of the formation and analysis of profits, to increase profitability from the point of view of the justification of management decisions for more effective implementation of strategic directions of activity and enterprise development.

Results. The article explores some theoretical approaches to the definitions of «profit» and «profitability». It has been determined that the main purpose of management decisions in an enterprise is to ensure profit and an appropriate level of profitability. It was noted that the factors that may affect profitability are divided according to the environment of the enterprise into internal and external factors. The main external and internal factors influencing profit distribution and profitability are described. It has been observed that the level of profitability depends not only on the profits of the firm, but also on other indicators: the assets of the enterprise, equity, borrowed capital, the income of the enterprise, the amount of taxes paid, working capital. The main indicators of profitability, their economic essence, calculation methods and optimum value were investigated.  Proposed reserves for increasing the profit of the enterprise and ways to increase its profitability, which are formed by the authors according to the main determinants of the management decisions for the development of the enterprise.

Conclusions. So modern economic science determines that profit and profitability are both the goal and the result of management decisions. The two categories are intrinsically linked and interdependent. It has been determined that the profit margin reserves should be based on an evaluation of the proposed indicators, since a comprehensive analysis of the proposed coefficients reveals the basic conditions for profit creation and the determinants of further development. For example, the authors propose a scheme to justify decisions on further development of the enterprise depending on the determinants of the level of profitability and profit. The increase in profitability reserves depends on the chosen business strategy. Thus, domestic enterprises should be guided not only by the availability of tools to generate profits, but above all by an optimal level of profitability, which will enable them to achieve long-term sustainable development, will make it resistant to crisis and bankruptcy and promote development of «social enterprise» in the country.

Keywords: profit; profitability; management decisions; enterprise; efficiency, determinants.

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