how net profit calculated?

Answer 1

Generally...

Gross sales
Less: Cost of goods sold
= Gross profit

Less: expenses
= Net income/(loss)

There are many variations depending on the type of business and the activities of that business but the above illustration is a the most common calculation used.

Answer 2

sales or income from operations - total expenditure( (increase)or decrease in stock+raw materials cost+salaries and wages+advertising and sale expenses+other expenses,if any)-interest paid-depreciation + income from investments +non recurring income ( - if non recurring, one time expenditure) gives net profit before tax on which corporate tax payabel will be worked out, which when deducted from the above pre-tax profit will give you the net profit.
Let us take an example where sales are 100 cr. raw materials cost is 85 cr, increase in stock 3 cr, depreciation 2cr,salaries 4 cr, interest paid 50 lakhs, income from investments 1cr, land sale 2 cr, It works out like this 100-85+3-2-4-.5+1+2 =14.5 cr which is profit before tax.Let us assume the corporate tax including surcharges at 35% which means, tax outgo of about 5.07cr.Then the net profit will be14.50-5.07=9.43 cr
The points to be noted here are : If there is a decrease in stock, it's value has to be deducted and if there is an increase in stock, it's value has to be added to the expenditure

Answer 3

Net earnings divided by average shares outstanding.

The amount of profit a company realizes after all costs, expenses and taxes have been paid.

Answer 4

Define the poeriod firs (month/year or even daily basis)

Add cost of products plus operating expenses +fixed exp Find this total Deduct value at cost of unsold products like closing stock

Find the total receipts like sales , interest charged etc From this total deduct the first total
If the answer is positive , Hi , it is Netprofit
Otherwise Net loss

Answer 5

1st, u have to find out the gross profit.

then,
Gross Profit + Revenue - Expenses = Net Profit

Answer 6

I will show the entries of the Income statement where Net profit is calculated.
Sales
Less, Cost of Goods sold
Selling and administrative expenses
Dpreciation expenses
----------------
Earnigns before Interest and taxes(EBIT)
Less, Interest expense
----------------
Earnings after Interest
less, Taxes
----------------
Net Income.
========
The bottom line gives the Net income.

Answer 7

overall income minus overall expense