1. Profit, its characteristics and types
Profit, its characteristics and types. Profitability of trading activity. Profit and profitability calculations. Factors influencing profit and profitability.

2. Introduction
Profit is the revenue remaining after all costs are paid. These costs include labor, materials, interest on debt, and taxes. Profit is usually used when describing business activity. But everyone with an income has profit. It's what's left over after paying the bills. Profit is the reward to business owners for investing. In small companies, it's paid directly as income. In corporations, it's often paid in the form of dividends to shareholders. When expenses are higher than revenue, that's called a loss. If a company suffers losses for too long, it goes bankrupt.

3. Types of Profit
Businesses use three types of profit to examine different areas of their companies. 1. Gross profit subtracts variable costs to revenue for each product line. Variable costs are only those needed to produce each product, like assembly workers, materials, and fuel. It doesn't include fixed costs, like plants, equipment, and the human resources department. Companies compare product lines to see which is most profitable.

4. 2. Operating profit includes both variable and fixed costs
2. Operating profit includes both variable and fixed costs. Since it doesn't include certain financial costs, it's also commonly called EBITA. That stands for Earnings Before Interest, Tax, Depreciation, and Amortization. It's the most commonly used, especially for service companies that don't have products. 3. Net profit includes all costs. It's the most accurate representation of how much money the business is making. On the other hand, it may be misleading. For example, if the company generates a lot of cash, and it's invested in a rising stock market, it may look like it's doing well. But it might just have a good finance department, and not be making money on its core products.

5. Companies analyze all three types of profit by using the profit margin
Companies analyze all three types of profit by using the profit margin. That's the profit, whether gross, operating, or net, divided by the revenue. It reveals how well the company uses its revenue. A high ratio means it generates a lot of profit for each revenue dollar. A low ratio means the company's costs are eating into its profits. Ratios differ according to each industry. Profit margins allow investors to compare the success of large companies versus small ones. A large company will have a lot of profit due to its size. But a small company might have a higher margin, and be a better investment, because it is more efficient.

6. Profit Formula Profit is calculated by the following formula:
π = R - C
Where π (the symbol for pi) = profit
Revenue = Price (x)
C = Fixed cost, such as cost for a building +Variable cost, such as the cost to produce each product (x)
x = number of units.

7. Profit Motive
The purpose of most businesses is to increase profit and avoid losses. That is the driving force behind capitalism and the free market economy. The profit motive drives businesses to come up with creative new products and services. They then sell them to the most people. Most important, they must do it all in the most efficient manner possible. Theorists Milton Friedman and Friedrich Hayek argue that the profit motive is the most efficient way to allocate economic resources. According to them, greed is good.

8. Two Foolproof Ways to Increase Profit
There are only two ways to increase profit. The first, and best, is to increase revenue. That can be done by raising prices, increasing the number of customers, or expanding the number of products sold to each customer. Raising prices will increase revenue if there is enough demand. Customers must want the product enough to pay higher prices. Increasing the number of customers can be expensive. It requires more marketing and sales. Expanding the number of products sold to each customer is less expensive. The trick is to understand your customer well enough to know which related products they might want.

9. The second way to increase profit is to cut costs
The second way to increase profit is to cut costs. That is a good method up to a point. It makes a company more efficient, and therefore more competitive. Once costs are down, the business can reduce prices to steal business from its competitors. It can also use this efficiency to improve service, and react more quickly. The biggest budget line item is usually labor. Companies that want to quickly increase profits will lay off workers. This is dangerous. Over time, the company will lose valuable skills and knowledge. If enough companies do this, it can lead to an economic downturn. That's because there aren't enough workers earning good wages to drive demand. The same thing happens when businesses outsource jobs to low-cost countries.

10. How Profit Drives the Stock Market
Profits are also known as earnings. Public corporations that are listed on the stock market announce them every three months in quarterly reports. That occurs during earnings season. They also forecast future earnings. Earnings season significantly affects how the stock market does. If earnings are higher than forecast, the company's stock price rises. If earnings are lower than expected, prices will drop. Earnings seasons are especially important to watch in the transition phases of the business cycle. If earnings improve better than expected after a trough, then the economy is coming out of the recession. It's headed into the expansion phase of the business cycle. Poor earnings reports could signal a contraction and recession.

11. Rules of pricing of extemporeus prescription
The price of the prescription drugs is the evaluation of the extemporal medicine considering the retail prices of substances included in its composition, as well as packaging and tariff for manufacturing. Pharmacy’s Tariff (Taxa Laborum) is evaluation of labor, material and other costs related to manufacturing of dosage form. The price of the prescription must always be marked upon it. This is necessary in order to fix the sum in case of renewal.

12. Historical aspects of Taxa laborum in the forming of retail prices for extemporaneous drugs. History of the apothecary tariffs starts from 1672 when first pharmacy was opened in Moscow. Since the tariffs for making medicines and health products packaging have been implemented the pharmacies get the possibility not only recover all the costs of the production process, but also earn a profit for the further development of logistics pharmacies.
The implementation of tariffs in pharmacies in Ukraine began in and was then introduced as the order that exists to this day, namely, "value of medicinal product prepared in a pharmacy is calculated by summing the cost of each ingredient that is consumed (including purified water, or for injection), the cost of packaging (cans, bottles, boxes, etc..) and the tarriff for manufacturing and packaging."

13. Tariffs at the pharmacy are accounted and reported in such documents:
Tariffs for making extemporaneous drugs - the recipe, after the cost of ingredients and packaging, as well as register book;
Tariffs for manufacturing dosage forms and packaging to stationary recipe - in - overhead requirements for each dosage form;
Tariffs for intrachemists packing in the laboratory journal packing a box under the specification;
Sum of tariffs received by drugstore for making extemporaneous drugs and packaging during the reporting period in the report of pharmacy per month.

15. In some countries the price of the prescription includes:
The compounding fee + the cost of the package + twice the costs of the ingredients.
The cost of the package should also be known exactly and this with the cost of labels, paper etc., should next be added to the price.

17. The procedure for determining the tariff should be taken fixed tariff for manufacturing dosage form, for powders and suppositories additionally assessed work on making each other dozen (1 to 10), over the first ten powders or suppositories.

18. Additional tariff is taken in the case when the specification includes one or more additional (more than two), each operation is evaluated adding the component (assessment for the introduction of an emulsifier, stabilizer as an additional component incorporated in the tariff for manufacturing dosage form and the calculation of the fare not included) and in case when the specification is poisonous, narcotic or equivalent material.

19. The actual time spent in compounding the prescription represent a definite cost and each prescription should carry its share of the general overhead expenses, such as a rent, light, heat etc., which make it possible to open the prescription department. When the actual costs have been determined, the amount to be charged for profit may be given consideration. It may be a definite addition to the actual cost (from 10 to 20 percent). A price is fixed which has been scientifically determined and in which there can be confidence should it be questioned. The proprietor is assured a reasonable profit.

20. Thank you for attention!