Residual earnings program for medium-sized companies

Historically, companies that manage to remain in a privileged position in any commercial market, is because they manage to design a financial program that allows them to maintain a constant flow of money, making every time invested in production functions and / or execution of external activities, produce dividends at all times, which is why to classify a company within the category of profitable industries, you must take into account the economic evolution that this has had the last 10 years of existence, as it is a prudent period to establish an appropriate plan for residual earnings at all possible levels of industry.

When analyzing the financial development of a company, the automation that it has at the productive level must be taken into account, because only in this way a production cycle will be achieved, allowing to take the business profit to unimaginable limits; on the other hand, all the economic functions will be taken to the maximum expression, which seek to maintain an adequate financial health for the industrial level where the company is located.

The residual profits of a company are planned, with the purpose that the product made of the industry triples its value once finished, that is to say, that each one of them are part of a commercialization chain, where percentages of profits different from the planned one are obtained; To achieve this we have to begin to execute an important part in the commercial markets and it is about the business participation in the stock exchange or simply the association with other companies that move within our commercial system, all this with the purpose of obtaining the commercial course from beginning to end of our product.

Let's see an example of residual profits to understand this concept a little more, let's suppose we have a company in charge of producing engine blocks for automobiles, our company is only in charge of designing the blocks and producing them, now how can we achieve residual profits with our product? Simple, we associate with a company in charge of assembling all the parts required for an automobile engine in our block and then it is sold to companies that produce automobiles, where of course we have shares, all this commercial process in order to obtain in each one of the commercializations, a small percentage of profits.

Explained in another way, let's say that the profit for the production of our engine blocks is 40%, for the assembly of the engine there is a 25% profit and for the production of the cars we have a profit of 35%; what represented for our company a profit of 40%, has become a total profit of 100%, with a residual return percentage of 60%, that is, every certain period of time our company will receive an income of residual money, for the sale of an engine and then for a car.

That is why medium-sized companies seek to couple all their production to industries that allow them to obtain residual profits throughout the commercial chain, in order to maintain economic growth over the time of execution of the business functions.