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Practical Use Of Economic Profit To Assess The Effectiveness Of Activities

Table 3: Analysis of the effectiveness of the activity of "Altayzdravnitsa" Sanatorium "Lazurny" LLC

Indicator Year Growth or decline
2017 2018 2019 2018/ 2017 2019/ 2018
1. Net accounting profit, RUB thousands -51 -136 -310 -85 -174
2. Average annual cost of equity, RUB thousands 261 167 -56 -94 -233
3. Average annual cost of invested capital, RUB thousands 18846 27134 24259 8288 -2875
4. Rate of return on invested capital (bank interest on deposits), % 6 7 5 1 -2
5. Normal profit after tax (p. 3 · p. 4 – p. 3 · p. 4 ·20%), RUB thousands 905 1520 970 615 -550
6. Economic profit (loss) (p. 1 – p. 5), RUB thousands -956 -1656 -1280 -700 376
7. Return on equity (ROE = p. 1 / p. 2 ·100), % -20 -81 -554 -61 -473
8. Return of invested capital on economic profit (p. 6 / p. 3 ·100), % -5 -6 -5.3 -1 -0.7
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