Economic and financial solutions to boost consumption and increase revenue at the mechanical tools export joint stock company

Thesis

Economic and financial solutions to boost consumption and increase revenue at the mechanical tools export joint stock company

Ngo Duc Thuan - K38 1104 1

Preface

To maintain and develop production and business activities, the first issue that any enterprise must pay attention to is that the products it produces are accepted by the market. Implementing good product consumption not only ensures the continuous reproduction process of the enterprise but also provides a solid foundation for the enterprise to maximize profits, constantly increase its position and competitiveness in the market.

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Business practices of enterprises show that product consumption is not an easy task to perform. In most production and business tasks, product consumption is always the most difficult problem for enterprises and becomes even more urgent in a fiercely competitive market economy. Therefore, along with the development of the market economy, methods to promote product consumption are increasingly of special interest to businesses.

Realizing the importance of product consumption, during my internship at the Export Mechanical Tools Joint Stock Company, I delved into the topic " Economic and financial solutions to promote consumption and increase revenue at the Export Mechanical Tools Joint Stock Company ".

The topic content includes 3 chapters.

Chapter I: Basic theories on product consumption and business sales revenue.

Chapter II: Current status of product consumption and revenue growth at the Company

Mechanical Tools Export Joint Stock Company.

Chapter III: Economic and financial solutions to promote consumption and increase

Revenue at Export Mechanical Tools Joint Stock Company.

Due to limited research time, in this thesis I only delve into the research on the situation of the company's main product consumption. Although I have tried my best, with limited knowledge and limited research conditions, this thesis will inevitably have shortcomings. I look forward to receiving guidance from teachers.

with the staff of the labor and salary organization department, accounting department,

the company's finance department to complete this thesis.

Chapter I: Basic theories on product consumption and business sales revenue.

1.1. Concept of product consumption

Nowadays, the market mechanism, the activities of enterprises must be linked to three stages: Purchasing raw materials, production and consumption. The market economy requires enterprises not only to have the task of producing products but also to have the task of consuming those products. The top goal and also the condition for the existence of enterprises is profit. To achieve the above goal, enterprises must best solve the "input" and "output" of the production process. Solving the "output" of the production process is the process of consuming the products of the enterprise.

Consumption of a business's products is the process by which the selling unit delivers the product.

to customers and collect money for those products.

The time when a product is determined to be completely consumed is when the enterprise has completed both stages: Delivering goods to the customer unit and the customer unit has paid or accepted payment. From the perspective of capital circulation, product consumption is the process of transforming capital from physical form to monetary form (H' - T'), making capital return to its original state when entering each business cycle but with a larger quantity, creating conditions for the enterprise to reproduce and expand. At the end of a production cycle, monetary capital is used repeatedly according to the cycle it has gone through through the reproduction process, described by Marx in the following diagram:

T – H…Production… H' – T'

(Consume)

It can be seen that product consumption is the final stage of the production and business process to realize the value and use value of goods through exchange relations. In this relationship, the enterprise provides the buyer with products and goods, and at the same time the buyer pays or accepts to pay an amount corresponding to the value of the number of products and goods.

1.2. Revenue from sales and service provision of the enterprise

1.2.1. Concept

When a business consumes its products, it will have

sales revenue or product sales revenue.

Sales revenue and service provision is the monetary expression of economic benefits that the enterprise has received or will receive during the period from the consumption of goods and services. In other words, it is the total amount of money from selling goods and services on the market after deducting revenue deductions (if any) and has been paid or accepted by customers.

So the time to determine sales revenue and service provision is determined

when product consumption is completed.

Sales revenue is recognized when the following five conditions are simultaneously satisfied:

+The enterprise has transferred most of the risks and benefits associated with ownership

own products or goods to the buyer.

+The enterprise no longer holds the right to manage the goods as the owner.

goods or control of goods.

+ revenue is determined relatively certainly.

+ Revenue has been received or will be received economic benefits from the sales transaction.

+ Identify costs associated with sales transactions.

1.2.2. Contents of sales revenue and service provision

Sales and service revenue includes:

-Sales revenue from production and business activities:

+Is the amount of money earned from selling products and providing services.

service for customers

+Additional fees collected in addition to the selling price (if any) subsidy, surcharge according to State regulations that the enterprise is entitled to for goods and services consumed by the enterprise during the period. Value of products and goods given as gifts, exchanged or consumed for production within the enterprise such as: Electricity produced for use in

power plants, finished cement for repair at cement factories...

-Sales revenue from financial activities is the amount of money received from financial investment or capital use during the period such as: joint venture interest

, loan interest, foreign currency transfer, securities trading, asset leasing, reversal of securities devaluation provisions.)

In addition, enterprises also receive income from unusual economic activities such as: revenue from the sale of fixed assets, debts with no owner or debts that no one can collect...

*Net revenue from sales and provision of services is determined as follows:

Net revenue

Sales revenue

and service provision -

Discounts

apart from

- Indirect taxes

Deductions include:

- Trade discount: is a reduction in the listed price for customers who buy in large quantities or who buy regularly.

- Sales discount: is a deduction for the buyer due to poor quality, incorrect specifications, or off-brand goods.

- Value of returned goods: is the value of goods that have been determined to be completed for consumption but are returned by customers and refused to pay.

-Indirect taxes include: value added tax calculated by direct method, tax

special consumption tax, import tax.

*For businesses calculating tax using the deduction method, net revenue is determined as follows:

Sales revenue

Net revenue

and provision of services - Deductions

1.2.3. Planning the business's sales revenue.

Sales revenue and service provision is an important financial indicator that shows the ability to continue the reproduction process of the enterprise. Therefore, every year, the enterprise must make a revenue plan for product consumption, on that basis, determine the annual sales and service revenue. Whether the revenue plan for product consumption is accurate or not is very important to the enterprise, it is related to many other financial plans such as: Working capital and fixed capital plan, profit plan...

*Basis for planning sales revenue and service provision:

+ Based on sales contracts and customer orders.

+ Based on market research results for key products

weakness of the business.

+Based on the business's product consumption situation in the first 3 quarters of the reporting year, analyze and predict the impact on product consumption.

+Based on the state's policies on promotion

encourage consumption of essential products and export products.

+Based on state guidelines on product prices.

+ Based on the business's product pricing policy to determine

unit price

*Contents of sales and service provision revenue plan:

S =  (Qti x Pi) i =1

In which: Qti is the output of products consumed in each planning period.

Pi is the unit selling price of each product type in the planning period.

S is the sales revenue and service provision of the planning period.

The way to determine Qt is as follows:

Qt = Qđ + Qx - Qc

In there:

Qđ: Quantity of products and goods remaining at the beginning of the planning period.

Qx: Number of products and goods expected to be completed in the planning period.

Qc: Quantity of products and goods in surplus at the end of the planning period.

+Qđ includes 2 parts: quantity of products and goods that have been delivered to customers but have not been accepted for payment and inventory products. Qđ is determined as follows:

Qđ=Qtc0=Qtcq3o+Qxq4o-Qtq4o In which:

Qtc0 is the remaining inventory at the end of the reporting year (based on the product consumption plan for the reporting year).

Qtcq3o is the inventory at the end of the third quarter of the reporting year (based on the annual product consumption plan).

report)

Qxq4o is the production volume of the 4th quarter of the reporting year (based on the production plan of the 4th quarter of the year).

report).

Qtq4o is the quantity of products consumed in the fourth quarter of the reporting year (based on the product consumption plan for the reporting year).

+Qx is based on the production plan of each product type.

+Qc: There are many methods for making forecasts, but they are usually based on the average balance ratio of the years the business has implemented and the production volume of the planned period.

Residual ratio bq = Error!

1.3. The need to promote product consumption and increase sales revenue

13.1. The meaning and importance of promoting product consumption

sales revenue

In a market economy, there is fierce competition between economic sectors. Production units are not only responsible for producing products but also for organizing the consumption of those products. In conditions of fierce competition and increasing consumer demand, the problem of product consumption is not an easy task for any business. Therefore, promoting product consumption to increase revenue is of great significance, determining the existence and development of the business.

The first purpose of product consumption is to earn revenue. This is an important source of finance for revenue to offset and cover production operating costs.

production and business such as: compensation for materials, wages of workers... and obligations to the State Budget. If the enterprise's products are not consumed or are consumed little, then the revenue will not be enough to offset the costs of production and business activities, the debt situation will increase. If this situation continues, the enterprise will go to the brink of bankruptcy.

On the other hand, when a business consumes its products, it proves that its products, in terms of quantity, quality, price, etc., are suitable for market tastes and accepted by consumers. This is the basis for businesses to organize production more closely to increasingly improve product quality and reduce costs, thereby helping businesses to take measures to further accelerate product consumption.

Under the condition that other factors remain unchanged, net revenue is proportional to

with operating profit.

LNtt = DTT - Ztt

When consumption increases, sales revenue and service provision increase. This leads to an increase in net revenue while the cost of consumption (Ztt) remains unchanged, causing consumption profit (LNtt) to increase. This is the source for businesses to set up funds such as: welfare reward fund, development investment fund, reserve funds... These funds help the production and business activities of the unit to be effective and safe. Moreover, setting up a development investment fund also allows businesses to build, purchase fixed assets, and increase in-depth investment. Increased revenue increases profits, thereby making the financial situation of the business stronger and stronger, helping businesses carry out the process of re-production and expansion, increase the scale of equity, and increase autonomy in their production and business activities.

On the other hand, the consumption work takes place quickly, promptly and increasingly, contributing to promoting the increase in the speed of working capital circulation, saving production and business costs. With the increased production and consumption volume, it creates conditions for the average unit cost to decrease, thereby lowering the unit price of the product, increasing profits for the enterprise. On the contrary, if the product consumption work is carried out slowly, it will prolong the production cycle, capital will be stagnant, slow to circulate, not only the production and business costs on

A unit of product increases but the business still spends a lot of time and money to deal with the backlog.

DTT

L =

VLĐ

In which: DTT is net revenue from sales and service provision during the period.

VLD is the average working capital during the period. L is the number of working capital turnovers.

When revenue increases but working capital remains unchanged, it will increase the number of working capital turnover. Conversely, when revenue decreases but working capital remains unchanged, it will decrease the number of working capital turnover.

Product consumption is important not only for businesses but also for the existence, growth and development of the entire national economy. Through consumption, the consumption needs of the whole society will be met, maintaining a balanced relationship between supply and demand of money and goods. Good consumption of goods will promote the circulation of goods, making money profitable, creating conditions for economic development.

1.3.2. Reality of product consumption and revenue of state-owned enterprises.

Switching to a market economy, businesses must take on all stages, from production to product consumption. Many businesses are confused and have not found effective solutions to promote product consumption and increase revenue. The solutions that businesses apply are only management solutions, economic and technical solutions, but unintentionally underestimate financial solutions because they have not yet realized their great impact.

In fact, the product consumption of enterprises still has many limitations, the inventory of goods increases, causing capital stagnation, slow working capital turnover, low efficiency of fixed capital use, putting enterprises in financial difficulties, reduced payment capacity, increased risk level, accumulated debts, many risks leading to bankruptcy. Some enterprises have to reduce production, even prolong the situation of not being able to consume products, having to suspend production. Besides, there are enterprises that quickly grasp and adapt to the economy.

market economy, find the right solutions to promote product consumption, increase revenue, and achieve high efficiency in production and business.

1.4. Factors affecting product consumption and sales revenue

In the current economic development, product consumption activities are increasingly vibrant and complex, whether manufactured products are consumed or not depends not only on the subjective will of the enterprise but also on many other objective factors. Some of the main factors affecting product consumption and sales revenue can be summarized as follows:

+ Volume of products produced and consumed

S=(Qi *Gi)

In which: Qi is the consumption output of product i

Gi is the selling price of product i

S is product sales revenue

Through the above formula, we see that in the case of unchanged selling price, the volume of consumed products directly affects the sales revenue in the period, and the volume of consumed products depends on the volume of products produced. If the production output is high, good quality, diverse designs, suitable for market demand, the consumption volume will increase, thereby increasing revenue and vice versa. If a lot of production is produced but exceeds market demand, no matter how attractive the product is to consumers, it will not be consumed, causing capital to stagnate due to large inventory products. If a product volume is brought to the market that is smaller than market demand, although the product is consumed, the sales revenue that the business has is lower than the revenue that the business should have achieved.

In the condition that other factors remain unchanged, sales revenue will be proportional to the number of products consumed during the period. Therefore, to increase sales revenue, businesses must strive to increase sales output by increasing the volume of products produced, and on the other hand, invest capital to develop production in both breadth and depth.

+ Quality, design, and style of products put on sale.

In the old mechanism, product quality only had a modest position in promoting and restraining consumption and sales revenue.

forced to use products created by manufacturers, with almost no choice

Whichever you choose, the manufacturer can only produce according to plan.

Nowadays, in the market mechanism, businesses compete fiercely with each other to consume products and dominate the market. Therefore, the issue of product quality is put first and becomes an effective tool to win in competition. Manufacturers and businesses all understand that product quality and reputation go hand in hand with revenue and profit. High quality products will have great purchasing power, so businesses can sell more, increasing revenue and thereby increasing profits. On the contrary, poor product quality, unsold products, reduced revenue, causing capital stagnation, causing difficulties in capital for production.

+Structure of consumer goods products.

The structure of consumed goods is the proportion of revenue of each type of product in the total revenue of consumed products. Changing the structure of consumed goods can change the revenue of consumed goods. Each type of product has a certain effect in satisfying consumer needs. In a market economy, consumer needs are increasingly high and increasingly diverse, so in order to survive and develop, businesses must come up with the most suitable structure of consumed goods to best meet the increasingly diverse needs of customers, thereby increasing consumption volume and increasing revenue. If a business increases the proportion of products with high prices and reduces the proportion of products with low prices, even though the total volume of consumed products and unit prices remain unchanged, the total revenue of consumed goods will increase and vice versa. However, no matter how the structure of consumed goods changes, it must ensure the production plan of the products that the business has signed a contract for.

+Business pricing

In the process of competition in the market, pricing strategy is considered a very flexible and highly artistic response of business people. Just a small change in price clearly shows the change in consumption volume. Prices are determined by the supply and demand relationship in the market, but to ensure revenue, businesses must make decisions on prices. Pricing decisions and pricing mechanisms have a strong impact on the purchasing decisions of consumers, especially those with low incomes.

Therefore, the right pricing policy has a positive impact on product sales revenue. Setting prices high or low depends on the strategy and goals of the business in each period (maximizing profits or expanding the market). Therefore, if the business performs well in production management, reduces product costs, thereby lowering the selling price compared to the general price of goods on the market, it will create a sharp and effective weapon in competition.

+ Factors related to market, competitors and methods

pay.

In a market economy, businesses must always operate according to the motto: "sell what the market needs". Therefore, in order to conduct consumption, market research and determining the target audience of the business are very important. In market research, the purchasing power of the population is the factor that has the greatest influence on the ability to consume the products of the business. There are market areas where people's income is high, so what they need is the quality and function of the product, not the price. On the contrary, there are also market areas where people's income is low, so what they care about is the quantity and price of goods. Therefore, through market research, businesses will come up with appropriate responses. In addition, businesses must pay attention to consumer tastes to meet the maximum needs of the market, on that basis increase sales volume and expand the market.

Another factor that significantly affects product consumption is the activities of competitors. Due to fierce competition, the consumption revenue of other businesses in the same field of operation is reduced. Therefore, the more and more detailed information a business knows about the activities of its competitors, the sooner it will be able to come up with a strategy to deal with and strengthen its position in the market.

Payment methods:

In a market economy, customer tastes and demands are increasingly high, different customers have different incomes. Therefore, to increase consumption volume, businesses must diversify payment methods (such as cash on delivery, installment payments with discounts on goods sold to customers...) to suit different customer groups, which also means that businesses have increased revenue. If

Businesses that do not diversify payment methods can only meet one set of needs.

customers thereby missing out on opportunities to increase revenue.

1.5. Some main financial solutions to promote product consumption and increase

revenue.

In business, product consumption is the top factor that businesses care about, how to attract customers to their products is always a difficult and thorny problem for any business. Therefore, businesses are especially interested in measures to promote consumption. Standing on the field of corporate finance, we can mention some measures as follows:

1.5.1. Improve the quality of consumed products.

To stand firm in the competitive market and increase the volume of consumed products, the first thing that businesses must focus on is product quality. Improving product quality means improving the characteristics of the goods, researching and perfecting the uses, functions, physical and chemical properties of the products. The measures that businesses often apply to improve product quality are: Investing in modern technological lines, using high-quality input materials, improving the skills of workers... Standardizing and testing product quality is also a task that businesses must carry out regularly and closely to maintain and improve product quality, ensuring to maintain the reputation of the business with consumers. However, improving product quality often leads to increased product prices due to large investment costs in the production and business process, at which time businesses are likely to face difficulties in product consumption because customers oppose price increases. Therefore, in order for products to be produced and consumed smoothly, businesses must effectively organize the production process, only then can they create products that are not only of high quality but also low cost, and accepted by consumers.

1.5.2. Build and choose appropriate product structure.

In order to survive and develop, enterprises must know how to adapt and integrate into their operating environment. The adaptability and flexibility in business of enterprises are specifically expressed through the change in the structure of consumer products. Continuously improve, innovate and diversify products. A reasonable product structure must be built on the basis of the results of market research and linked to the production capacity of the enterprise so as to both meet customer needs and bring benefits to the enterprise itself. Enterprises should limit or stop producing products that are no longer suitable for the market and bring low profits, regularly research and improve products, and manufacture new products to better satisfy consumer needs. For signed consumption contracts, enterprises must properly implement the product plan, not chasing after profits and breaking the structure of consumer products, causing damage to customers and reducing the reputation of the enterprise.

Consumer tastes today are increasingly high in terms of quantity, quality and variety. Enterprises need to grasp this characteristic to build a reasonable product structure, linked to the market and improve the economic efficiency of the enterprise, making decisions to narrow or expand the production scale of each product accurately and promptly.

1.5.3. Develop a flexible pricing policy.

In the market mechanism, the price of each type of product and service is the result of a competitive process to balance the interests of the seller and the buyer. Therefore, the pricing policy of the business must be very flexible and sensitive to suit the characteristics of each market area and different customers. The important requirements that emerge when pricing are:

The price of goods must ensure that the business covers its costs.

production and consumption of products.

The price of goods must ensure that the business earns a profit.

certain.

The price of each item must be consistent with the supply and demand relationship of the item at each time.

The price of goods must be acceptable to consumers.

The price of each type of goods and services must be considered in relation to each other.

with the prices of competing products and the prices of substitute products.

However, in each situation of the business's position, product reputation and different market and customer circumstances, the above requirements are given attention according to different priority positions. In the case of products being produced in stock or lost, the business can reduce the selling price, sell at a slow break-even point to quickly recover capital, and switch to producing new products. In the condition of needing to penetrate and expand the market, the target of product volume becomes the top goal, usually businesses often apply the strategy of low pricing or discounting to attract customers to consume products and increase market share. The discount can be implemented according to the volume of products purchased by customers or according to each type of customer or on specific occasions... For high-quality products with a reputation in the market, businesses can apply a high pricing strategy to gain more profit.

In conditions where per capita income is still low like in our country, price becomes a sharp competitive tool. To increase the speed of product consumption and increase revenue, building a flexible policy suitable for each specific condition is one of the effective measures that businesses need to apply.

1.5.4. Perfecting the product distribution system .

The goal of product distribution is to target consumers, both satisfying customer needs and stimulating consumption. Currently, businesses often apply two forms of distribution:

Direct distribution to consumers through stores. Distribution through intermediaries such as agents and brokers.

To promote the role of distribution channels, businesses often select intermediaries, grasp information about the distributors used. The system of agents and brokers enjoy certain incentives in terms of commission rates, payment terms... creating a close relationship with the business. Thanks to that, the manufacturer

can focus on work while taking full advantage of distribution channels to expand and dominate the market.

1.5.6. Actively expand the market and find new customers .

To survive and develop in a market economy, a business cannot be satisfied with its current customers but must proactively seek new markets and new customers. This potential customer segment will create an opportunity for the business to increase its revenue many times over, expanding new development possibilities for the business. The business that is the first to exploit the potential customer segment will have no competitors and will be able to rapidly expand its market.

The process of penetrating a new market requires businesses to research the ideal characteristics of the market and the characteristics of customers. Businesses need to know the main characteristics that the market requires for products in terms of the number of buyers and sellers participating in the market, the geographical location of the market, the information system, the security situation... This useful information will help businesses accurately estimate the requirements of consumers for products in order to have specific strategies and measures.

1.6. The role of corporate finance in promoting product consumption and increasing

sales revenue

Corporate finance plays an important role in mobilizing sufficient and timely capital for production and product consumption activities.

, to increase revenue, production must be on schedule, products must be of guaranteed quality, diverse designs, suitable for customer tastes, and at the same time, it is necessary to focus on market research, to do so, there must be capital. The role of corporate finance is first of all reflected in correctly determining the capital needs necessary for production and product consumption, followed by choosing the most appropriate and effective methods and forms of capital mobilization with the lowest cost. On that basis, create conditions for businesses to invest in modern technology, innovate machinery, develop production in the direction of product diversification, increasingly rich designs, increasingly improved quality and lower product costs, research to grasp market demand

, thereby creating conditions to expand the market and increase revenue.