1137:
955:
specific" project, product, or division. "The classic example would be the cost of headquarters staff." "Although it is theoretically possible to calculate profits for any sub-(venture), such as a product or region, often the calculations are rendered suspect by the need to allocate overhead costs." Because overhead costs generally do not come in neat packages, their allocation across ventures is not an exact science.
58:
950:
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Net profit is a measure of the fundamental profitability of the venture. "It is the revenues of the activity less the costs of the activity. The main complication is . . . when needs to be allocated" across ventures. "Almost by definition, overheads are costs that cannot be directly tied to any
885:
876:
837:
Net profit: To calculate net profit for a venture (such as a company, division, or project), subtract all costs, including a fair share of total corporate overheads, from the gross revenues or turnover.
1343:. Content from this book used in this article has been licensed for modification and reuse under the Creative Commons Attribute Share Alike 3.0 and Gnu Free Documentation licenses. See talk. The
1211:
945:{\displaystyle {\text{Net Income}}={\text{Gross Profit}}-{\text{Operating Expenses}}-{\text{Other Business Expenses}}-{\text{Taxes}}-{\text{Interest on Debt}}+{\text{Other Income}}}
822:, & design and development costs are included. Net income can also be calculated by adding a company's operating income to non-operating income and then subtracting off taxes.
1027:
779:
In simplistic terms, net profit is the money left over after paying all the expenses of an endeavor. In practice this can get very complex in large organizations. The
829:
percentage is a related ratio. This figure is calculated by dividing net profit by revenue or turnover, and it represents profitability, as a percentage.
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It is computed as the residual of all revenues and gains less all expenses and losses for the period, and has also been defined as the net increase in
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must itemise and allocate revenues and expenses properly to the specific working scope and context in which the term is applied.
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is substituted for net income, yet this is not preferred due to the possible ambiguity. Net income is informally called the
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Stickney, et al. (2009) Financial
Accounting: An Introduction to Concepts, Methods, and Uses. Cengage Learning
31:
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985:(earnings before interest and taxes) = operating profit + interest income + other non-operating income
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1190: – distribution made by a liquidating company to pay out its entire equity to its shareholders
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1178: – Gross profit as a percentage (the difference between the sales and the production costs)
991:(Pretax profit, earnings before taxes) = EBIT − interest expenses − other non-operating expenses
1160: – Payment made by a corporation to its shareholders, usually as a distribution of profits
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endorses the definitions, purposes, and constructs of classes of measures that appear in
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Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; David J. Reibstein (2010).
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871:{\displaystyle {\text{Net Profit}}={\text{Sales Revenue}}-{\text{Total Costs}}}
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refers to the (gross) income minus taxes and other deductions (e.g. mandatory
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Marketing
Metrics: The Definitive Guide to Measuring Marketing Performance.
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dividends will be subtracted too, though they are not an expense. For a
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Operating profit = gross profit − overheads and other indirect costs
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Net income can be distributed among holders of common stock as a
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1154: – Carrying value of goods sold during a particular period
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are commonly found as synonyms for net income. Often, the term
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that results from a company's operations. It is different from
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1290:
Needles, et al. (2010) Financial
Accounting. Cengage Learning.
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Earnings before interest, taxes, depreciation and amortization
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because it is typically found on the last line of a company's
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Operating Income Before
Depreciation and Amortization (OIBDA)
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Upper Saddle River, New Jersey: Pearson
Education, Inc.
776:, which forms the first line of the account statement).
1214: – Accounting measure of a company's profitability
976:= sales revenue − cost of sales and other direct costs
1319:"Gross Profit vs. Net Income: What's the Difference?"
1022:
expenses (combined costs of operating the company) -
963:
Net profit on a P & L (profit and loss) account:
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846:
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Net income is usually calculated per annum, for each
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Pages displaying wikidata descriptions as a fallback
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Pages displaying wikidata descriptions as a fallback
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30:"Bottom line" redirects here. For other uses, see
27:Measure of the profitability of a business venture
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1220: – Benefit lost by a choice between options
880:A detailed example of a net income calculation:
1345:Marketing Accountability Standards Board (MASB)
1070:– (customer discounts, returns, and allowances)
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832:
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1258:"IAS 1 Presentation of Financial Statements"
794:. The items deducted will typically include
323:International Financial Reporting Standards
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1004:Another equation to calculate net income:
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1172: – Sum of all earnings before taxes
1303:. New Business Playbook. Archived from
14:
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810:company, subtracted costs may be the
732:or held by the firm as an addition to
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802:), and minority interest. Likewise,
748:(also depending on UK and US usage),
313:Generally-accepted auditing standards
1353:Common Language in Marketing Project
970:= price (of product) × quantity sold
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1184: – Type of financial statement
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1208: – Measure of a firm's profit
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1000:= Net profit − dividends
508:Accounting organizations
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1432:Governmental accounting
1351:as part of its ongoing
1263:. IFRS Foundation. 2012
1197:Net income per employee
915:Other Business Expenses
256:Amortization (business)
1550:Accounting terminology
994:Net profit = EBT − tax
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1048:Earnings before taxes
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798:, financing expense (
380:Management discussion
1407:Financial accounting
1301:"Net Income Formula"
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300:Accounting standards
1509:Capital expenditure
1473:Cash flow statement
1422:Forensic accounting
1224:Profit (accounting)
1054:= Net income (EAT)
768:(a related term is
690:, and taxes for an
573:Earnings management
543:Positive accounting
417:Double-entry system
407:Bank reconciliation
212:Revenue recognition
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1489:Debits and credits
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483:Sarbanes–Oxley Act
412:Debits and credits
247:Cost of goods sold
202:Matching principle
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1349:Marketing Metrics
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792:fiscal year
762:bottom line
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526:Development
503:Accountants
399:Bookkeeping
318:Convergence
276:Liabilities
207:Materiality
95:Major types
1539:Categories
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1451:Statements
1393:Accounting
1341:0137058292
1244:References
1110:Net profit
1100:Net profit
891:Net Income
849:Net Profit
785:accountant
781:bookkeeper
772:, meaning
754:net profit
724:Definition
714:net income
710:households
656:net profit
644:net income
640:accounting
561:Misconduct
187:Fair value
137:Management
79:Management
50:Accounting
1267:April 14,
1114:net sales
1078:net sales
1064:Net sales
1042:(EBIT) -
1008:Net sales
927:−
919:−
911:−
903:−
861:−
583:Hollywood
463:Financial
365:Cash-flow
122:Financial
1158:Dividend
1129:See also
1093:– total
1050:(EBT) -
1020:SG&A
825:The net
770:top line
742:earnings
730:dividend
688:interest
636:business
568:Creative
538:Research
468:Internal
455:Auditing
271:Goodwill
266:Expenses
117:Forensic
42:a series
40:Part of
1494:Revenue
1236:Revenue
959:Example
774:revenue
718:pension
533:History
427:Journal
286:Revenue
172:Accrual
18:Net pay
1545:Profit
1339:
758:income
746:income
738:profit
674:minus
672:income
646:(also
478:Report
432:Ledger
375:Income
370:Equity
281:Profit
261:Equity
237:Assets
142:Social
107:Budget
1482:Terms
1261:(PDF)
923:Taxes
736:. As
666:, or
473:Firms
102:Audit
1400:Type
1337:ISBN
1269:2012
1034:and
983:EBIT
752:and
740:and
708:For
682:and
638:and
242:Cash
127:Fund
112:Cost
989:EBT
818:,
783:or
634:In
147:Tax
84:Tax
1541::
1120:–
1116:–
1112:=
1102:=
1089:=
1080:–
1076:=
1066:=
1038:=
1018:-
1014:=
694:.
686:,
662:,
658:,
654:,
650:,
642:,
44:on
1385:e
1378:t
1371:v
1355:.
1271:.
935:+
895:=
853:=
623:e
616:t
609:v
34:.
20:)
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