How to calculate net profit?

Date:

2019-04-29 13:00:21

Views:

777

Rating:

1Like 0Dislike

Share:

Table of contents:

If you are the owner of a small business, the most important indicator is the net profit that it brings you. After all, net profits – directly the money your business brought you, and which you can dispose of at their discretion. So, this indicator is extremely important to determine before to calculate the economic efficiency. The effectiveness is not that other, as the ratio of net profit to cash investments.

 

As you might guess, it is not enough to deduct from your income costs, to determine how much you have on hand will remain clean of money, because it is also necessary to take into account several important factors. In fact, all this is done quite easily, and if you still don't know how to calculate the net profit, then after a few minutes, this process will become simple.

 

So, first you need to determine the gross profit, also popularly known as just profit. How to calculate profit, there is nothing difficult. If you are aware of the cost of production, it is enough to subtract the cost from the price and multiply it by the sales. If you haven't considered when you calculate the cost of fixed costs such as depreciation, rent, salaries of managers and so forth, that must be subtracted from the resulting total amount of them and more. The result is the gross profit, with which we have to work before you can calculate the net profit.

 

Now from gross profit you need one by one to take away or add the following indicators: financial profit, other operating profit and, of course, tax deductions. Financial profit-is the profit received by the enterprise, but which is not directly related to its primary activity. To make it easier to understand this – the income or expenses from the game on the securities market, fee for borrowed funds or, conversely, income from various investments. Thus, financial profit does not involve participation of the enterprise in the process of earning income, but involves the use of means of the enterprise. Our financial profit, and move on.

 

The Next item in our work with how to calculate the net profit, will the other operating profit. Under this strange name hides only, gains and losses, which may be called accidental. For example, at the enterprise there was a fire or the enterprise managed to find a treasure on its territory. Despite the fact that each situation seems unlikely, in fact, such a random "parishes” and “care” the enterprise is quite a lot and forget about them is not necessary.

Recommended

Insurance for pregnant women when traveling abroad: features, views, and reviews

Insurance for pregnant women when traveling abroad: features, views, and reviews

Currently, in our country there is a huge number of insurance companies that are willing to provide the necessary services at any time. Insurance expectant mothers – is a separate activity that SK are doing very reluctantly. The fact is that pr...

Construction company

Construction company "Rosstroyinvest": feedback from real estate investors. LCD "Old fortress". LCD "Golden domes"

One of the most promising participants in the Russian real estate market, particularly in the joint construction, is the "Rosstroyinvest". Reviews of investors are saying about the leading role of the construction company year of Foundation, in 2002,...

The conditions for obtaining credit in modern banking institutions

The conditions for obtaining credit in modern banking institutions

Any aspiring entrepreneur is faced with the problem of insufficient funding of their own business. Currently, this problem can be solved by knowing the terms of the loan and taking the necessary amount from the Bank. This method is best for solving p...

 

And finally, it's time to deduct from your earnings tax payments to the state. Tax legislation is quite complex and confusing. Some income may not be taxed, and some costs, however, cannot be deducted when calculating the taxable base. So if you don't know how to accurately determine your debt to the state, it is best to seek the assistance of professionals, then no problems. Anyway, subtract the amount of tax deductions  - and what you get will be pure profit.

 

Now that you know how to calculate net profit, you can easily and quickly analyze the true success of your business. It is likely that a very successful enterprise can be unprofitable, and the company in which you were going to put an end to bring an impressive net profit. To protect yourself from mistakes, always keep this figure in mind while taking important management decisions.


Article in other languages:

AR: https://tostpost.com/ar/finance/16799-how-to-calculate-net-profit.html

BE: https://tostpost.com/be/f-nansy/32479-yak-razl-chyc-chystuyu-prybytak.html

DE: https://tostpost.com/de/finanzen/32168-wie-berechnen-sie-den-reingewinn.html

ES: https://tostpost.com/es/finanzas/32031-c-mo-calcular-la-ganancia-neta.html

HI: https://tostpost.com/hi/finance/18429-how-to-calculate-net-profit.html

JA: https://tostpost.com/ja/finance/16493-how-to-calculate-net-profit.html

KK: https://tostpost.com/kk/arzhy/32817-alay-taza-payda.html

PL: https://tostpost.com/pl/finanse/33858-jak-obliczy-zysk-netto.html

PT: https://tostpost.com/pt/finan-as/33639-como-calcular-o-lucro-l-quido.html

TR: https://tostpost.com/tr/maliye/29235-nas-l-hesaplamak-i-in-net-kar.html

UK: https://tostpost.com/uk/f-nansi/33032-yak-rozrahuvati-chistiy-pributok.html

ZH: https://tostpost.com/zh/finance/9433-how-to-calculate-net-profit.html






Alin Trodden - author of the article, editor
"Hi, I'm Alin Trodden. I write texts, read books, and look for impressions. And I'm not bad at telling you about it. I am always happy to participate in interesting projects."

Comments (0)

This article has no comment, be the first!

Add comment

Related News

"Alfa-Bank": credit cards, reviews, comments

If you have already had the practice of receiving wages on the card for you - credit card «Alfa Bank». Customer reviews indicate that with the experience of using a debit card “addictive” to convenient cred...

The Bank

The Bank "Opening": the client testimonials and description of services

currently, a large number of financial institutions provides services to legal entities and individuals. Among them should be noted the Bank "Opening", which reviews recommend it as reliable and safe. Started this Agency in the ea...

Current liabilities is... the Degree of solvency in current liabilities

Current liabilities is... the Degree of solvency in current liabilities

Current liabilities called the real debt of the organization, existing at the reporting date. Their maturity leads to the outflow of resources and a reduction in benefits. We next consider the composition and characteristics of th...

The luxury tax. The list of vehicles that are subject to the luxury tax

The luxury tax. The list of vehicles that are subject to the luxury tax

many people on hearing such a phrase as the luxury tax. What does it mean? What is this term defined? What is it for? An interesting question. And quite relevant. So, it is necessary to consider this topic in more depth and tell y...

How to get insurance for the loan? Early loan repayment

How to get insurance for the loan? Early loan repayment

One of the additional services, which are paid by the Russians during the loan, - insurance. It reduces the risk of non-repayment of funds. Upon the occurrence of certain circumstances during the period of the contract, the Bank g...

When will the dollar go? How to analyze the situation on the currency market and to understand: the dollar will rise or fall?

When will the dollar go? How to analyze the situation on the currency market and to understand: the dollar will rise or fall?

the US dollar Rate against the ruble in recent years highly variable: after the 2008-2009 crisis, the U.S. currency has fallen in price considerably. In 2013 and early 2014 has increased again. Market experts believe that the situ...