The essence of the profits of enterprises and the activity of enterprises in Ukraine in recent years are analysed in this article. The ways of increase of the enterprise’s revenue in the current context are suggested.

Key-words: revenue, enterprise, personnel, productivity, target-costing.


У статті розглянуто сутність прибутку підприємств та проаналізовано діяльність підприємств в Україні протягом останніх років. Запропоновано способи збільшення прибутку підприємств в сучасних умовах.

Ключові слова: прибуток, підприємство, персонал, продуктивність, таргет-костінг.


В статье рассмотрена сущность прибыли предприятий и проанализирована деятельность предприятий в Украине в последние годы. Предложены методы увеличения прибыли предприятий в современных условиях.

Ключевые слова: прибыль, предприятие, персонал, производительность, таргет-костинг.

Problem statement. In the market economy, the main purpose of any business is profit. The profit is of the utmost importance, because it provides filling of incoming part of the state budget, and assists investment prospects of the business and economic activity, moreover, it provides stable financial condition and competitiveness of an enterprise. A vital and essential issue is ensuring stable growth of profit for Ukrainian enterprises.  Nowadays, many businesses and commercial establishments do not turn a profit, which means they are close to liquidation and bankruptcy. The growing number of unprofitable enterprises negatively influences the level of income of the Ukrainian state budget and leads to an increase in unemployment and deterioration of life quality.

Analysis of late investigations and publications. Among the scientists who paid their attention to questions of formation and usage of profit by Ukrainian enterprises were V. Babich, V. I. Blonska, Ye. M. Vynnychenko, A. V. Vysotska, O. I. Vuzhynska, V. M. Oparin, A. M.  Poddierohin, O. I. Poprozman and others.

Aim and objectives of the investigation. The ways of profit’s increasing in enterprises under the present-days conditions are the issues of research in the article.

Statement of primary material. Profit is a financial category of paramount importance which displays a positive financial result of the enterprise’s economic activity, describes the effectiveness of production and eventually shows the amount and quality of manufactured products, the state of efficiency of work and the level of cost price. At the same time profit influences on strengthening commercial account, intensification of production in any property categories.

Nowadays in the Ukrainian economy there is a negative tendency for reduction the profitability of companies and receiving damages. In connection to this point, it is needed to adapt quickly to existing conditions and apply new methods of management while managing an enterprise that will permit to reduce expenses of enterprise significantly and provide the increase in its incomes. In this case, it is necessary to examine the functioning of enterprises in Ukraine and the process of getting financial results. A negative tendency could be seen exploring the dynamics of the number of enterprises in Ukraine from 2010 to 2014 (table 1).

Table 1

The dynamics of market participants’ number in Ukraine in 2010-2014

Year Total enterprises Large enterprises Medium-sized enterprises Small enterprises

of these

micro enterprises

sole proprietors
2010 2183928 586 20983 357241 300445 1805118
2011 1701620 659 20753 354283 295815 1325925
2012 1600127 698 20189 344048 286461 1235192
2013 1722070 659 18859 373809 318477 1328743
2014 1932161 497 15906 324598 278922 1591160

Source: [4]

According to the Table 1, during 2012-2014, the number of enterprises in Ukraine has grown, with companies 1,600,127 in 2012 to 1,932,161 in 2014. Nevertheless, it should be taken into account that this increase occurred among the general reduction of large, medium-sized and micro enterprises. In 2014 there were 497 large, 15,906 medium-sized and 324,598 small enterprises in Ukraine, which is significantly less than in the previous year. The main reason for reducing the number of enterprises in Ukraine is unprofitable business activity.

Table 2

Financial results of enterprises before taxation in Ukraine for 2012-2015.

Year Financial result (balance), m. UAH. Enterprises which made profit Enterprises which made debt
Rate, % Financial result (balance), m. UAH. Rate, % Financial result (balance), m. UAH.
January-September 2015 -183894.0 60.2 233243.5 39.8 417137.5
2014 -564376.8 66.3 233624.7 33.7 798001.5
2013 11335.7 65.9 209864.5 34.1 198528.8
2012 75670.2 64.5 248035.9 35.5 172365.7

Source: [4]

Over the last few years, from 2012 to September 2015, the financial results of enterprises before taxation declined continuously.  In 2012, the enterprises’ profit in Ukraine before taxation totalled 75.67 billion. UAH., whereas in September 2015 the loss amounted to 183.894 billion. UAH. (Table 2). It is worthwhile to mention the fact that in Ukraine the share of unprofitable enterprises is growing, and each third company is unprofitable. As of September 2015, activities of almost 40% of Ukrainian enterprises were unprofitable. [4] The situation is worsening after paying income tax.

Table 3

Disposable profit (dead loss) of the Ukrainian companies for 2012-2015.


Financial result (balance),

m. UAH.

Enterprises which made profit Enterprises which made debt
Rate, % financial result Rate, % financial result, m. UAH.
2015 -186729.2 59.7 154563.5 40.3 341292.7
2014 -590066.9 65.5 202704.5 34.5 792771.4
2013 -22839.7 65.0 179259.6 35.0 202099.3
2012 35067.3 63.0 210607.6 37.0 175540.3

Source: [4]

From 2012 to September 2015 a negative tendency can be seen to a permanent reduction of disposable profit of enterprises and for this reason, they receive damages. When the disposable profit of enterprises in Ukraine amounted to 35 bln. UAH. in 2012, then in January-September 2015 the company received dead loss of 187.729 bln. UAH. What is more, 40.3% of Ukrainian enterprises in January-September 2015 operated losses.

Taking into account negative situation, there is a problem of finding reserves to increase profits for enterprises. The personnel are a resource of the utmost importance. One of the basic resources of increasing enterprise’s profit is increasing the productivity of employees and encouraging creative solving of problems. In order to increase productivity and encourage employees to work better Western countries’ companies use various methods of employee’s participation in profits. However, this method is appropriate to use only in case of permanent improving workers’ productivity and increasing the efficiency of production in general [2].

Employee’s participation in company profits can occur in various ways:

  • employees are paid a certain, pre-determined percentage of disposable profit.
  • a share of disposable income is paid in proportion to the salary of the employee.

Taking into consideration small pensions it is appropriate to make deferred payments for employees, which in this case could be considered as an additional pension. What is more, the survey of 38 large US corporations found out that 28 of them put into practice deferred payments [1].

According to the investigations of leading Western universities, increase of staff productivity can be achieved in simple ways. The positive impacts on the productivity of employees have also temperature, lighting, colour and the presence of plants in the office. These facilities are quite simple to use and low-cost. According to The National Laboratory Named by Lawrence Berkeley, productivity can be increased to 10% at the temperature of 22-23 degrees. [6] The presence of plants can increase productivity by 15% [8]. The research carried out at the University of Texas proved that the white walls in the office adversely affect productivity. [7]

Also, it is necessary to draw attention to the methods of organising the production costs, which are widely used by enterprises around the world. It would be relevant to use the method of target-costing in the enterprises – method of managing cost price (expenses on products’ manufacturing), the aim of which is in decreasing cost price of production during the whole manufacturing process at the cost of applying manufacturing and scientific researches and developments. This method considers the computation of product’s cost price on the basis of pre-determined price on realization.   The method of target-costing is widely spread in Japan where more than 80% of large companies (Toyota, Daihatsu, Nissan, Matsushita, NEC, Sony, Cannon, Olympus, Nippon) are using it. This method is becoming popular gradually in the USA and Europe, where it is used by companies such as DaimlerChrysler, Procter & Gamble, Caterpillar, ITT Automotive [5].

The other method – “kaizen-costing” – is an up-to-date method of managing expenses, which is used for achieving target cost price, but in contrast to “target-costing” lies in the permanent improvement of processes’ quality for the whole enterprise with the participation of all workers, which gives an opportunity to decrease unprofitable expenses. This method is widely used by Japanese corporations (Toyota).

The main advantage of this method is that it provides a permanent reduction of expenses and keeping them at the appropriate level, still a disadvantage is a necessity of motivating employees and corporate culture, which supports the attraction of the personnel into the enterprise’s activity.

Summary.  Due to the difficult economic situation in the country, there is a decline in profits. With a purpose of getting and ensuring permanent growth of profit enterprises should ensure the participation of personnel in incomes, use modern methods of increasing employee’s productivity and apply cost organizing methods.


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