What does net profit have to do with undistributed profits

The differences between profit distribution and undistributed profit are:

1. In terms of relationships.

Profit distribution is the parent account of undistributed profits, and undistributed profits are only one of the sub-accounts in the profit distribution account.

Profit distribution and undistributed profit are the relationship between the first-level ledger account and the second-level detailed account;

2. In terms of definition.

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

Undistributed profit is the undistributed profit of the enterprise. It can continue to be distributed in subsequent years and is part of the owner's equity until the distribution is made. From a quantitative point of view, the undistributed profit is the balance of the undistributed profit at the beginning of the period plus the net profit realized in the current period, minus the various surplus reserves withdrawn and the profits ceded.

3. On the report:

Net profit is the net income after deducting operating costs and various expenses, which is a profit and loss account.

The undistributed profit at the end of the period is the total amount of undistributed profit at the beginning of the year plus the net profit accumulated in the income statement for the current year, which belongs to the owner's equity account.

In addition to undistributed profits, there are other transfers, withdrawals of statutory surplus reserves, withdrawal of discretionary surplus reserves, withdrawal of reserves**, withdrawal of enterprise development**, return of profits to investment, dividends payable on preferred shares, dividends payable on ordinary shares, dividends on ordinary shares converted into capital (or share capital), etc.

Revenues - Costs - Business Taxes - Expenses = Total Profits.

Gross profit - corporate income tax = net profit.

Net Profit - Provident Fund - Investor's Share of Profits, etc. = Undistributed Profits.

The remaining amount of net profit after it has been distributed in accordance with the regulations is the undistributed profit.

The undistributed profit in owner's equity is the cumulative amount of undistributed profit in the previous period.

Not necessarily. The undistributed profit in the balance sheet can be understood as the cumulative calculation of the enterprise after deducting the distributed profit, while the net profit in the income statement indicates the operating profit of the enterprise in a certain period.

Since the undistributed profits are continuously accumulated year by year, the undistributed profits of the following years are equal to the undistributed profits of the previous year plus the net profits of the current year, so they are not equal.

The relationship between the undistributed profit of the balance sheet and the net profit of the income statement is as follows: undistributed profit at the end of the balance sheet = undistributed profit of the negative statement of the asset book at the beginning of the year + accumulated net profit of the current income statement - withdrawal of surplus reserve - distribution of dividends + surplus reserve to cover losses + (or) the amount of profit and loss of previous years adjusted for the current year transferred from the "profit and loss adjustment of previous years" account to "undistributed profit of Zhoutong". Net profit is the profit realized in the current period, and undistributed profit is the profit that has been retained and not yet distributed.

The relationship between net profit and undistributed profit: Undistributed profit refers to the profit that the net profit realized by the enterprise is retained in the enterprise after making up for losses, withdrawing surplus reserves and distributing profits to investors. Undistributed profits have two meanings:

One is the profit that is left for disposal in the following years; Second, it does not refer to the profits that are only used for specific purposes. Relative to the rest of the owner's equity, the business has greater autonomy over the use of undistributed profits.

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

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

The income tax rate of enterprises is statutory, and the higher the income tax rate, the less net profit. There are two income tax rates in China, one is the 25% income tax rate for general enterprises, that is, 25% of the total profits should be handed over to the state finance as taxes; In addition, the preferential tax rate is adopted for foreign-funded enterprises and some high-tech enterprises, with an income tax rate of 15%. When the operating conditions of the enterprise are comparable, the operating efficiency of the enterprise is better if the income tax rate is lower.

Chinese Life's net profit in the first three quarters of 2007 was 24.6 billion.

For example, if an electrical appliance store has an operating income of 40 million yuan a year, a total of 20,000 household appliances have been purchased, the average purchase price of each household appliance is 1,500 yuan, the employee's annual salary is 1 million yuan, the housing rental and other expenses are 4 million yuan, and the business tax rate is 3%, then the total cost of the electrical appliance store for a year is:

Total cost = total purchase price of household appliances + employee wages + housing rental costs = 2 1500 + 100 + 400 = 3500 (10,000 yuan).

Business tax = turnover Business tax rate = 4000 3% = 120 (10,000 yuan).

The total profit of this appliance store is:

Profit refers to the total amount of Yuanqing = operating income - operating cost - business tax.

4000-3500-120=380 (10,000 yuan) When the income tax rate is 25%, its net profit is:

Net Profit = Total Profit - Income Tax Expense.

Income tax expense = 380 25% = 95 (10,000 yuan).

Net profit = 380-95 = 285 (10,000 yuan).

It should be noted that income tax is the taxable income multiplied by the tax rate, but the taxable income is sometimes not equal to the total profit, because there are adjustment items in the crack.

The relationship between undistributed profit and net profit is: undistributed profit at the end of the period = beginning of the period + net profit accumulated this year.

The relationship between net profit and undistributed profit: undistributed profit at the end of the balance sheet period = undistributed profit from negative balance sheet at the beginning of the year + accumulated net profit from the income statement for the current period - withdrawal of surplus reserve - distribution of dividends + surplus reserve to cover loss + (or) the amount of profit and loss of previous years adjusted for the current year transferred from the account of "profit and loss adjustment of previous years" to "undistributed profit".

Credit: Surplus Reserve (Statutory Surplus Reserve, Discretionary Surplus Reserve). Cover losses with surplus reserves:

Borrow: surplus reserve (statutory surplus reserve, arbitrary surplus reserve). Credit:

Profit distribution – undistributed profit (surplus reserve to make up for deficit).

According to the relevant regulations, the reserves**, enterprise development**, employee incentives and benefits** withdrawn by foreign-invested enterprises**. Borrow: Profit distribution - undistributed profits (withdrawal of reserves**, withdrawal of enterprise development**, withdrawal of employee incentives and benefits**).

Credit: surplus reserve (reserves**, enterprise development**), employee remuneration payable, etc.

When cash dividends or profits are distributed to shareholders or investors at the general meeting of shareholders: debit: profit distribution - undistributed profits.

Credit: Dividends payable. The ** dividends distributed to shareholders by the general meeting of shareholders shall be after the capital increase procedures.

Debit: Profit distribution – undistributed profit. Credit: Equity.