What are the three formulas for calculating net profit?

Updated on Financial 2024-06-06
13 answers
  1. Anonymous users2024-02-11

    The three formulas for calculating profit are: net profit = total profit - income tax expense; Gross profit = main business income - main business cost in proportion to revenue; Profit Operating profit + net investment income + net non-operating income and expenditure.

    Therefore, the relationship between the three is: operating profit, gross profit, net profit, net profit is the final operating result of an enterprise, the net profit is more, the operating efficiency of the enterprise is good; If the net profit is less, the operating efficiency of the enterprise is poor, and it is the main indicator to measure the operating efficiency of an enterprise.

    Net profit refers to the total profit of the enterprise in the current period minus the amount of income tax, that is, the after-tax profit of the enterprise. Income tax refers to the tax calculated and paid to the state by the enterprise on the total amount of profits realized in accordance with the standards stipulated in the income tax law. It is a deduction item from the total profit of the enterprise.

    It refers to the company's profit retention after paying income tax in accordance with the provisions in the total profit, which is also known as after-tax profit or net profit. The amount of net profit depends on two factors, one is the total profit, and the other is the income tax expense.

    There is no unified, clear definition of gross profit in the division of profit ranges.

    Net profit is a comprehensive reflection of the company's operating results, and it is also the concrete embodiment of its final results.

    Operating income: refers to the total amount of revenue recognized by the business of the enterprise, including the main business income and other business income.

    Operating costs: refers to the total actual costs incurred by an enterprise in operating its business, including the cost of main business and other business costs.

    Non-operating income: Profits incurred by an enterprise that are not directly related to its daily business activities.

    Non-operating expenses: losses incurred by an enterprise that are not directly related to its daily business activities.

  2. Anonymous users2024-02-10

    There are three formulas for calculating profits: net profit = total profit - income tax expense; Gross profit = main business income - main business cost in proportion to revenue; Profit Operating profit + net investment income + net non-operating income and expenditure 1, operating profit is greater than gross profit is greater than net profit, net profit is the final operating result of an enterprise, net profit is more, the operating efficiency of the enterprise is good; If the net profit is less, the operating efficiency of the enterprise is poor, and it is the main indicator to measure the operating efficiency of an enterprise. 2. Operating profit = operating income - operating costs - taxes and surcharges - sales expenses - management expenses - financial expenses - credit impairment losses - asset impairment losses + fair value change income (or - fair value change loss) + investment income (or - investment loss).

    3. What is the difference between gross profit and net profit, gross profit is the profit part of the sales revenue after deducting the costs generated by the main business, and net profit refers to the company's profit retention after paying income tax in accordance with the provisions in the total profit

  3. Anonymous users2024-02-09

    There are three formulas for calculating profits: net profit = total profit - income tax expense; Gross profit = main business income - main business cost in proportion to revenue; Profit Operating profit + net investment income + net non-operating income and expenditure.

    1.Net profit is the value of total profit minus income tax. That is, the company's after-tax income.

    2.Profit is an important metric for a company. It is usually an important indicator to measure the company's business performance, and it is also an important reference for users of financial statements such as investors.

    3.Total profit is made up of three main components: operating profit, investment income and non-operating income.

    Expansion: The profit structure is basically reasonable and has the following meanings:

    The profit structure of the enterprise should match the asset structure of the enterprise.

    The cost changes were reasonable, and there were no unreasonable reductions in costs from year to year.

    The composition of each part of the total profit is reasonable.

  4. Anonymous users2024-02-08

    Answer: Hello dear, the relevant calculation formula for profit is as follows (1) Operating profit operating profit = operating income - operating costs - business taxes and surcharges - sales expenses - management expenses - financial expenses - asset impairment loss Fair value change income (1 fair value change loss) 10 investment income (1 investment loss) (2) total profit, total profit = operating profit, non-operating income - non-operating expenses 3) net profit, net profit = total profit - income tax expense. Expansion: Composition of ProfitsProfit refers to the operating results of an enterprise in a certain accounting period.

    Profit includes the net amount of income minus expenses, gains and losses directly included in the current profit, etc.

  5. Anonymous users2024-02-07

    There are three formulas for calculating profits: net profit = total profit - income tax expense; Gross profit = main business income - main business cost in proportion to revenue; Profit Operating profit + net investment income + net non-operating income and expenditure 1, operating profit is greater than gross profit is greater than net profit, net profit is the final operating result of an enterprise, net profit is more, the operating efficiency of the enterprise is good; If the net profit is less, the operating efficiency of the enterprise is poor, and it is the main indicator to measure the operating efficiency of an enterprise. 2. Operating profit = operating income - operating costs - taxes and surcharges - sales expenses - management expenses - financial expenses - credit impairment losses - asset impairment losses + fair value change income (or - fair value change loss) + investment income (or - investment loss).

    3. What is the difference between gross profit and net profit, gross profit is the profit part of the sales revenue after deducting the costs generated by the main business, and net profit refers to the company's profit retention after paying income tax in accordance with the provisions in the total profit

  6. Anonymous users2024-02-06

    Net Profit = Total Profit - Income Tax Expense.

  7. Anonymous users2024-02-05

    There are three formulas for calculating profits: net profit = total profit - income tax expense; Gross profit = main business income - main business cost in proportion to revenue; Profit Operating profit + net investment income + net non-operating income and expenditure 1, operating profit is greater than gross profit is greater than net profit, net profit is the final operating result of an enterprise, net profit is more, the operating efficiency of the enterprise is good; If the net profit is less, the operating efficiency of the enterprise is poor, and it is the main indicator to measure the operating efficiency of an enterprise. 2. Operating profit = operating income - operating costs - taxes and surcharges - sales expenses - management expenses - financial expenses - credit impairment losses - asset impairment losses + fair value change income (or - fair value change loss) + investment income (or - investment loss).

    3. What is the difference between gross profit and net profit, gross profit is the profit part of the sales revenue after deducting the costs generated by the main business, and net profit refers to the company's profit retention after paying income tax in accordance with the provisions in the total profit

  8. Anonymous users2024-02-04

    Total profit = operating profit + non-operating income - non-operating expenses.

    Profit refers to the operating results of a business in a certain period. Profit includes the net amount of income less expenses, which is directly included in the gains and losses of the current profit.

    Total accounting profit refers to the profit left over by the owner of the business after paying all the factor remuneration except the capital. Accounting profit is the result of calculation according to accounting standards. The basic method of calculation is to recognize the income of the enterprise in a certain accounting period according to the realization principle, determine the cost of the same period according to the matching principle, and subtract the income from the related expense cost, that is, the profit of the enterprise in this accounting period.

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  9. Anonymous users2024-02-03

    Net profit is calculated as follows: Total Profit - Income Tax Expense.

    Net profit (income) is the company's profit retention after paying income tax in accordance with the provisions of the total profit, which is also generally known as after-tax profit or net income.

    Net profit is the final result of an enterprise's operation, and the more net profit, the better the operating efficiency of the enterprise; If the net profit is less, the operating efficiency of the enterprise is poor, and it is the main indicator to measure the operating efficiency of an enterprise.

  10. Anonymous users2024-02-02

    There are three formulas for calculating profits: net profit = total profit - income tax expense; Gross profit = main business income - main business cost in proportion to revenue; Profit Operating profit + net investment income + net non-operating income and expenditure 1, operating profit is greater than gross profit is greater than net profit, net profit is the final operating result of an enterprise, net profit is more, the operating efficiency of the enterprise is good; If the net profit is less, the operating efficiency of the enterprise is poor, and it is the main indicator to measure the operating efficiency of an enterprise. 2. Operating profit = operating income - operating costs - taxes and surcharges - sales expenses - management expenses - financial expenses - credit impairment losses - asset impairment losses + fair value change income (or - fair value change loss) + investment income (or - investment loss).

    3. What is the difference between gross profit and net profit, gross profit is the profit part of the sales revenue after deducting the costs generated by the main business, and net profit refers to the company's profit retention after paying income tax in accordance with the provisions in the total profit

  11. Anonymous users2024-02-01

    The formula for calculating net profit is: net profit, total profit, income tax expense.

    The three formulas for calculating profit are: net profit = total profit - income tax expense; Gross profit = main business income - main business cost in proportion to revenue; Profit Operating profit + net investment income + net non-operating income and expenditure.

    The relationship between the three is: operating profit, gross profit, net profit, net profit is the final operating result of an enterprise, the net profit is more, the operating efficiency of the enterprise is good; If the net profit is less, the operating efficiency of the enterprise is poor, and it is the main indicator to measure the operating efficiency of an enterprise.

    Difference Between Gross Profit and Net Profit.

    1. The concept is different.

    Gross profit is the balance of the sales revenue (selling price) of the commercial enterprise after subtracting the original purchase price of the goods, which is also known as the difference between the purchase and sale of goods. Net profit refers to the total profit of the enterprise for the current period minus the amount of income tax, that is, the after-tax profit of the enterprise. Gross profit minus commodity circulation fees and taxes is net profit.

    2. The influencing factors are different.

    Gross profit is influenced by the purchase price and sales of goods**. Net profit is affected by gross profit and income tax expense.

  12. Anonymous users2024-01-31

    There are three formulas for calculating profits: net profit = total profit - income tax expense; Gross profit = main business income - main business cost in proportion to revenue; Profit Operating profit + net investment income + net non-operating income and expenditure 1, operating profit is greater than gross profit is greater than net profit, net profit is the final operating result of a smart enterprise, net profit is more, the operating efficiency of the enterprise is good; If the net profit is less, the operating efficiency of the enterprise is poor, and it is the main indicator to measure the operating efficiency of an enterprise. 2. Operating profit = operating income - operating costs - taxes and surcharges - sales expenses - management expenses - financial expenses - credit impairment losses - asset impairment losses + fair value change gains (or fair value change losses) + investment income (or - investment losses).

    3. What is the difference between gross profit and net profit, gross profit is the profit part of the sales revenue after deducting the costs generated by the main business, and the net profit refers to the company's profit retention after paying income tax in accordance with the provisions of the total profit

  13. Anonymous users2024-01-30

    Net profit is a very important economic indicator. For investors in a business, net profit is a fundamental factor in obtaining a return on investment. So for enterprises, how to calculate net profit?

    1. Profit of main business = income of main business - cost of main business - tax and surcharge of main business.

    2. Profit of other business = income from other business - other business expenditure.

    3. Operating profit = main business profit + other business profit - operating expenses - management expenses - financial expenses + investment income - investment loss.

    4. Total profit = operating profit banquet + subsidy income (excluding ** appropriation) + non-operating income - non-operating expenses.

    5. Net profit = total profit - income tax.

    Factors influencing net profit.

    The main factor influencing net profit is corporate income tax. The income tax rate of enterprises is statutory, and the higher the income tax rate, the lower the net profit. There are two types of income tax rates in China.

    First, the general enterprise income tax rate is 25%, that is, 25% of the total profit is handed over to the state finance, in addition, the preferential tax rate for foreign-invested enterprises and some high-tech enterprises is 15%. Under the same operating conditions, enterprises with lower income tax rates are more efficient.

    The importance of net profit.

    Net profit is a very important economic indicator. For corporate investors, net profit is a fundamental factor in obtaining a return on investment. For business managers, net profit is the basis for business management decisions.

    At the same time, net profit is also a basic tool to evaluate the profitability, operating performance and solvency of an enterprise, and it is a comprehensive index that reflects and analyzes various situations of an enterprise. Net profit is the end result of business operations. The higher the net profit, the better the operating efficiency of the enterprise; If the net profit is small, the operating efficiency of the enterprise is very low.

    It is the main indicator to measure the operational efficiency of a business.

    Definition and calculation formula of net profit margin.

    Net profit margin is defined as the percentage of net profit from operations as a percentage of net sales or as a percentage of invested capital.

    Net profit margin = net profit operating income 100%.

    Net Profit = Total Profit (1 Income Tax Rate).

    Total profit = operating profit + non-operating income - non-operating expenses.

    Operating profit = operating income Operating costs Business taxes and surcharges Period expenses Asset impairment loss + fair value change gain Fair value change loss + investment income (investment loss).

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