Sensr Application

Is your business in actual profit?
Answer: The mathematics is very simple. If you've invested money and time in your business, compare it with investment in bonds/debentures.
Typically bonds gives you 9-14% return. Let's take 10%.
On Investment of Rs 1000000, you will get Rs 1100000 i.e. your original amount Rs 1000000 and additional Rs 100000 at the year end.
But business with same investment amount (let's say a factory):
Profit= Total revenue - Total expenses - Depreciations.
If this profit amount is more than Rs 100000 earned through bonds, then you're actually in profit.
This helps while you decide to make any product by your own or decide to outsource it. Sometimes outsourcing/making your product by vendor (or buying spare parts, assemble and sell) can be beneficial than setting up a new unit for making a product in your business. So decide wisely if you want to make it on your own or buy it !!!