How to calculate the net profit?

If you are the owner of your small business, then the most important factor for you is the net profit, which he brings to you.After all, the net profit - is just the money that your business is brought to you, and you may dispose of at its discretion.So, this figure is extremely important to determine before you calculate the cost-effectiveness.Efficiency also is nothing else than the ratio of net profit to cash investments.

As you might guess, it is not enough to deduct from your income the expenses to determine how much you have on hand will be clean 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 do not know how to calculate the net profit, after a few minutes of this process for you will be elementary.

So, first you need to determine the gross profit, also known popularly as simply profit.In fact, how to calculate profit, no big deal.If you know the cost of production, it is enough to deduct the cost of the price, and multiplied by the volume of sales.If you do not take into account when calculating the cost of fixed costs such as depreciation, rent, salaries of managers and so on, must be deducted from the total amount of the resulting still them.The result is the gross profit with which we have to work before you calculate the net profit.

Now, the gross profit margin is necessary to take away one by one, or to add the following indicators: financial profit, other operating income, as well as, of course, tax deductions.Financial income - is the profit that the company has received, but which is not directly related to its core activities.To make it easier to understand this - income or expenses from the game in the securities market, payment of borrowed funds or, on the contrary, income from various investments.Thus, the financial benefit does not involve the participation of the enterprise in the process of generating income, but involves the use of the enterprise.We take into consideration financial profits and move on.

next term in our work so as to calculate the net profit, operating profit is another.Under this name hides incomprehensible, only, gains and losses, which can be called random.For example, there was a fire at the plant or enterprise managed to find the treasure in its territory.Despite the fact that, individually, the situation seems unlikely, in fact, such random "come" and "go" at the enterprise happens quite a lot and forget them not.

Finally, it's time to deduct from your earnings tax payments to the state.Tax legislation is complex and confusing.Some income may not be taxed, and some of the costs, in contrast, can not be deducted when calculating the tax base.So, if you do not know how to accurately determine your debt to the state, it is best to seek professional help to avoid problems later.Anyway, subtract the amount of tax deductions - and what you will and will be pure profit.

Now that you know how to calculate net income, you can quickly and easily analyze the real success of your business.It is likely that seemingly quite successfully operating company may in fact even be unprofitable and the company in which you are going to put an end - to bear an impressive net profit.To protect yourself from mistakes, always keep this figure in mind, making important management decisions.