A Study On The Application Of Profit And Profit Analysis In Small And Medium - Sized Enterprises

Economic mathematics method is a powerful modern governance tool. Its obvious features are: it jumped out of abstract theory research frame of the pure mathematics, often involves many economic phenomenon, solved through mathematical method, make natural science "socialization" and social science "natural”. With the method of measurement, calculation, the mathematical model describing social phenomenon, prove the social science research rapid development. The starting point of business is profit, without profit, companies could not survive. It is leading the era of knowledge economy, an unprecedented speed era of economic globalization, better educated and informatization. In such a rapidly changing social and economic background, the enterprise development environment is more complex, and competition between enterprises is increasing. In the socialist market economy, the competition is fierce, an enterprise want to be permanently in an impregnable position, and realize the goal of survival and development of enterprise management and profitability, management decisions is very important.CVP analysis originated in the 20 s of the last century, in order to strengthen the enterprise internal management and control of enterprise, western developed countries improve their market competition ability and the ability to resist risk, in order to realize the strategic target of enterprise management and set up a kind of management method.CVP analysis is based on a number factors of related products production and sales, sales price, variable cost and fixed cost and the mutual relationship between profits, through the analysis of measurement and a method to determine the goal profits of enterprise. While making cost decision, enterprise should pay special attention to the interdependent relationship between and among cost, yield and profit, enterprise should analysis CVP. At present our country small and medium-sized enterprises have become an important part of national economy, so the application of CVP analysis in small and medium-sized enterprises, it has great significance in increasing the market competitiveness of small and medium-sized enterprises, at the same time there is a lack of application of CVP analysis of small and medium-sized enterprises theory, personnel quality is not enough, internal system is imperfect and so on. To solve the above problems, this paper puts forward to strengthening the construction of theory, studying business on a regular basis and improving the company’s internal financial system. For enterprise in the growth period, mature period and so on, in the different stages, using different index analysis respectively, for enterprises in the profit and loss, under different conditions such as application of CVP index are discussed. This paper introduces the basic principle and basic content of CVP analysis method, it introduces the characters of the enterprise accounting management and the importance of the application of CVP analysis, analyzing the limitations in the application of this quantity and the fixed cost rules different caliber, fixed cost and variable cost is not easy to be distinguished, and introduces the application of the CVP analysis in rising prices, production and marketing balance, and different cases, such as perfect competition market, at last, according to the X enterprise has a smaller scale, simply financial management. Analyzing the actual situation, such as the traditional method of charging an account, analysis CVP analysis’ s application in the enterprise, and according to the analysis results provide favorable data support for enterprise decision. To obtain high profit is the ultimate goal of a business operation, so how to make good use of CVP analysis which is a tool for financial management is of great significance, is also a key step to improve enterprise product market share.