Monday, March 7, 2016

Gross Profit and Net Profit

                              I. Gross Profit

-Gross Profit is sales revenues minus the cost of good sold.

Gross profit is a company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services. Gross profit will appear on a company's income statement or can be calculated with this formula:

Gross profit = revenue - cost of goods sold

Also called "gross margin," "sales profit" and "gross income".

                                 II. Net Profit

the actual profit after working expenses not included in the calculation of gross profit have been paid.

Often referred to as the bottom line, net profit is calculated by subtracting a company's total expenses from total revenue, thus showing what the company has earned (or lost) in a given period of time (usually one year). also called net income or net earnings.

By : Laiqa

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