What is the difference between gross profit net profit and net profit?

Gross profit refers to the profit of the business after deducting the operating costs from the operating income of the enterprise. Pure profit and net profit are the same concept, and the difference between net profit and gross profit is net profit minus the taxes, management expenses, financial expenses, etc. that need to be paid.

Gross profit is the basis of net profit, there is no gross profit can not talk about net profit, but in different industries the gross profit and net profit are very different, for example, in the liquor industry gross profit is very high, because the cost of liquor is not high, but some liquor such as Moutai is very expensive, and for coal and steel industries, its gross profit is relatively low, because a lot of heavy equipment is needed, and the cost of these equipment is very high. Some companies have a high gross profit, but the net profit is very low, or even a loss state, the reasons for this situation are many, there are many reasons for this situation, there are management reasons of the company, such as the cost of sales is too high, resulting in no net profit, and it may be that the company's financial management is chaotic, resulting in the loss of book funds, let's talk about the difference between gross profit and net profit:

First, the situation is different

Gross profit can reflect the operating status of a business, such as whether the goods are selling well, etc. However, the net profit can reflect the overall management level of an enterprise. When investing in a business, you need to pay attention to its gross profit, because without a high enough gross profit, the investment value of the company itself is not large.

Second, the calculation method is different

The calculation method of gross profit is relatively simple, and gross profit can also be understood as book profit, which is the profit left after subtracting costs from separate revenues. There are many factors that need to be considered for net profit, such as taxes, impairment losses and sales expenses.

Third, the influencing factors are different

There are many factors that affect gross profit, such as some non-operating profits and losses, occasional losses, etc., which will have an impact on gross profit. The influencing factors of net profit mainly depend on the amount of gross profit.

Introduction: People must be clear about the concept of doing business before doing business, and if they don't figure it out, it is likely to cause business losses, and in serious cases, it will lead to their own bankruptcy. <>

Gross profit refers to the profit part of sales revenue after deducting the costs incurred by the main business. Then some of the costs incurred by the main business do not include the management expenses of the enterprise, financial expenses and sales expenses, and do not include the non-operating income of the tax enterprise and the non-operating expenses and taxes such as taxes, etc., the gross profit margin is the percentage of gross profit in the sales revenue or operating income of goods, where the gross profit is the difference between the income and the operating costs corresponding to the income. <>

Net profit, also referred to as net profit and net profit and net income or net profit, is mainly the net income of the production and operation of the enterprise, and the total income of the commercial enterprise minus the various expenses inside and outside the business and the sales tax and education fee surcharge and the family association income minus the joint venture expenditure, is the net profit of the enterprise, and the net profit is the main indicator to measure the operating efficiency of an enterprise, specifically refers to the total profit of the enterprise in the current period minus the amount of income tax, which is the after-tax profit of the enterprise. <>

Gross profit is the basis of respect, is the level of gross profit of an enterprise directly determines his net profit, and the establishment of the ultimate is to be distributed to the largest shareholder, if it is a listed company, the quality of profit will also directly affect the trend of stock prices, and the difference between gross profit and net profit in different industries is relatively large, at the same time there are many factors that affect gross profit, because gross profit will vary from industry to industry, because the cost of sales and management expenses are fixed for all enterprises, but the difference in non-recurring profit and loss can be very large, Moreover, it will indirectly affect net profit, and the non-recurring profit and loss paper is not directly related to the company's business, but is an occasional profit or loss.

Gross profit refers to the operating income minus the cost of operation, profit refers to the operating profit minus the tax paid, net profit refers to the profit obtained by subtracting all the costs of the business, the net profit is larger than the gross profit and the net profit profit, the net income of the enterprise in a year will generally look at the net profit, and the gross profit level directly determines the net profit level.

Gross profit is the basis of net profit, the higher the level of gross profit directly determines his net profit, and the net profit is ultimately distributed to major shareholders, the gross profit and net profit of different industries are very different, for example, Moutai, net profit refers to the profit after removing costs.

Gross profit refers to deducting all expenses, and some of the remaining costs belong to gross profit, net profit and net profit are the same, they are some of the interests we get to consume and invest, and then subtract some taxes, and we will get pure profit.

1. Different definitions:

1) Net profit: It is the net income of the production and operation of the enterprise. The total income of a commercial enterprise minus the various expenses inside and outside the business, as well as the sales tax, education surcharge, and joint venture income minus the joint venture expenses payable, is the net profit of the enterprise.

It is the final financial result of all economic activities of the entire enterprise.

2) Gross profit: refers to the profit part of sales revenue after deducting the costs generated by the main business. The costs incurred by the main business do not include the management expenses, financial expenses, sales expenses and other period expenses of the enterprise, nor do they include the non-operating income, non-operating expenses, income tax and other taxes of the tax enterprise.

2. The calculation method is different:

Gross profit = operating income - operating costs.

Net Profit = Revenue - Costs - Expenses.

The specific details of net profit and gross profit are as follows:

Pure profit is another popular way of saying net profit. In other words, net profit and net profit mean the same thing, but professionally they both use net profit to make financial statements. Normally, gross profit is an integer amount, while net profit may be a negative amount, and most of the time the gross profit amount is higher than the net profit amount.

Operating income minus the cost price of the products sold is the gross profit. In business activities, the profit margin is highest in terms of gross profit.

1. What is the difference between net profit and gross profit?

1. The difference between net profit and gross profit includes:

1. Different definitions:Net profit is the total profit of the enterprise in the current period minus the amount of income tax, and the gross profit is the main business income minus the cost of the main business, depending on the profitability of the main business items;

2) The calculation formula is different. Net profit is equal to total profit minus income tax expense, and net profit is tax profit. Gross profit is equal to revenue minus costs, and gross profit is pre-tax profit.

2. Legal basis: Article 87 of the Civil Code of the People's Republic of China.

A legal person established for public welfare purposes or other non-profit purposes and does not distribute the profits obtained to investors, founders or members is a non-profit legal person.

Non-profit legal persons include public institutions, social organizations, associations, social service organizations, and so forth.

2. What is the calculation method of gross profit?

1. Sales revenue excluding tax minus cost excluding tax divided by sales revenue excluding tax;

2. The balance of the sales revenue of the commercial enterprise after deducting the original purchase price of the commodity. The symmetry of net profit is also known as the difference between the purchase and sale of goods. Because it has not subtracted the commodity circulation fees and taxes, it is not net profit, so it is called gross profit;

3. If the gross profit is not enough to compensate for the circulation expenses and taxes, the enterprise will incur losses. The percentage of gross profit to the revenue from the sale of goods or operating income is called gross margin.

1. The meaning is different.

The balance of the sales revenue (selling price) of the commercial enterprise after deducting the original purchase price of the goods. The symmetry of net profit is also known as the difference between the purchase and sale of goods.

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.

2. The determinants are different.

Net profit refers to 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 profit. The amount of net profit depends on two factors, one is the total profit, and the other is the income tax expense.

In China, the difference between the purchase and sale of industrial products refers to the difference between the ex-factory price and the wholesale price of the same product (the difference between the wholesale price and the retail price is called the batch zero difference), and the difference between the purchase and sale of agricultural and sideline products refers to the difference between the purchase of the same agricultural and sideline products and the wholesale or retail price of the same kind of agricultural and sideline products.

3. The role is different.

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 gross profit margin of commodity sales directly reflects the price difference level of all, major categories and certain commodities operated by the enterprise, and is the basis for accounting for the operating results of the enterprise and whether the formulation is reasonable.

Encyclopedia - Maori.

Encyclopedia - Net Profit.

1. What is the difference between net profit and gross profit?

1. The difference between net profit and gross profit is as follows:

1) Profits are different. The net profit is the profit of all costs. Gross profit is at cost;

2) The content is different. Net profit includes gross income minus all expenses, including benefits, dividends, retention and other expenses. The gross profit is the main business income minus the main business cost;

3) The situation reflected is different. The high net profit indicates the better the operating efficiency of the enterprise, which can be used as the main indicator to measure the various situations of the enterprise. Gross profit can be used as the basis for accounting whether the enterprise is reasonable.

2. Legal basis: Article 6 of the Basic Standards of Accounting Standards for Business Enterprises.

Definition of profit and conditions for its recognition.

a) Definition of profit.

Profit refers to the operating results of an enterprise in a certain accounting period. Normally, if the company realizes profits, it means that the ownership equity of the enterprise will increase and the performance will be improved; On the other hand, if the company incurs a loss, it means that the ownership equity of the company will be reduced and the performance will decline. Profit is often an important indicator to evaluate the performance of corporate management, and it is also an important reference for investors and other users of financial reports when making decisions.

2) The composition of profits.

Profit includes the net amount of income minus expenses, gains and losses directly included in the current profit, etc. Among them, the net amount of income minus expenses reflects the operating performance of the enterprise's daily activities, and the gains and losses directly included in the current profit reflect the performance of the enterprise's non-routine activities. Gains and losses directly included in the current profit refer to the gains or losses that should be included in the profit or loss for the current period, which will eventually cause an increase or decrease in the owner's equity, and are not related to the owner's capital investment or the distribution of profits to the owner.

Enterprises should strictly distinguish between income and gains, expenses and losses, so as to reflect the operating performance of the enterprise more comprehensively.

3) Conditions for the recognition of profits.

Profit reflects the concept of income minus expenses and gains minus losses, therefore, the recognition of profits mainly depends on the recognition of income and expenses and gains and losses, and the determination of its amount also mainly depends on the measurement of the amount of income, expenses, gains and losses.

2. What are the legal provisions for the distribution of corporate profits?

The legal provisions governing the distribution of corporate profits are as follows:

1. Shareholders shall pay dividends according to the proportion of paid-in capital contributions, and when the company increases its capital, shareholders have the right to subscribe for capital contributions in accordance with the proportion of paid-in capital contributions. However, all shareholders agree not to distribute dividends according to the proportion of capital contribution or do not subscribe for capital contribution in priority according to the proportion of capital contribution;

2. After the company withdraws the statutory reserve fund from the after-tax profits, it can also withdraw any reserve fund from the after-tax profits. The limited liability company shall, in accordance with the regulations, distribute the after-tax profits after the company makes up for the losses and withdraws the provident fund, and the shares shall be distributed according to the proportion of shares held by the shareholders, except for those that are not distributed according to the proportion of shares held by the articles of association.

The difference between gross profit and net profit: A business that does not make money is not socially responsible. Making money is making profit.

Profit is divided into gross profit and net profit (net profit and net profit are basically one concept). Net profit is net profit. Gross profit refers to total revenue excluding costs.

Net profit refers to the profit after deducting costs. Therefore, the relationship between the total profit and the net profit is included in the inclusion relationship. Distinguishing from financial concepts:

Gross profit = main business income - main business cost, that is, main business profit; Net profit = main business income - main business cost - business tax and surcharge + other business profit - period expenses + investment income + non-operating income - non-operating expenses - income tax, that is, the last line of the income statement.

If you want to do big business, deal with the relationship between gross profit and net profit, make gross profit bigger and net profit smaller. The new social retail model has become the preferred way for many enterprises to seize the C terminal. At the heart of this model are:

Make the gross profit bigger and make the net profit smaller, and it can extract more than 60%. Increase gross profit: It is not a simple way to raise the price, but to improve the gross profit in the context of comprehensive consideration of cost performance.

The core purpose is to distribute profits to consumers and merchants. In this way, the enthusiasm of consumers can be fully mobilized. Make the net profit small:

A large part of the gross profit is allocated to consumers and merchants, in order to ensure the market competitiveness of products, it is necessary to make their profit margins small. Only by producing products with high gross profit and low net profit can we fully mobilize market resources and become bigger and stronger.

If a business wants to continue to grow, it must have the mentality that cash flow is more important than profit. For cash flow and profit, the feedback given by finance is: there is nothing without profit, but without cash flow, the operation of the enterprise will stop completely.

That's why in recent years, we've seen some companies burn money in financing for several years in a row and lose money for several years in a row, but they are still able to raise a lot of money and still live happily ever after. By understanding their survival patterns, we can fundamentally overturn our thinking: those companies that can make greater cash flow will have a better understanding of capital markets and will find it easier to raise capital.