In a market economy, the modern enterprise, or rather their leaders should have a mass of knowledge and skills in order to "stay afloat."Ignorance of the basic rules and laws of business leads to disastrous results, with this comes very quickly.The article below is an attempt to deal with such a concept as the net profit - the most important factor that affects the profitability of any enterprise and analysis which gives an opportunity to understand whether or not to maintain and develop the business further, or should look for other possibilities of earnings.
In theory, the net profit is part of the balance sheet profit of each enterprise, which remains at the disposal of the owners or shareholders after will be paid all taxes, fees, royalties and other commitments made to the budget.In most cases, net income is used to increase the working capital of the enterprise to generate funds and reserves, and also to carry out the reinvestment in production.
Of course, there is the dependence of the volume of net income from the volume of gross profits and the amount of taxes.In addition it is on the basis of the available volume of net profit, calculates dividends to the shareholders of the company.
net profit for each company are very important.Net profit can be considered a result of the company for the period in which this income was demonstrated.Net profit clearly demonstrate the amount of funds received by the company after the payment of all tax revenues, salaries and other payments-binding.It is clear that the increase in net profit means that the company has worked well in a certain period and opposite decrease in its performance, and the more they care "minus" means that certain measures should be taken to avert bankruptcy.It is therefore important to know how to determine the net profit.Simple instructions on the calculation of the most important indicator is shown below.
- calculation of net income is not such a difficult task.Initially, you need to define the time period for which will be calculated.
- Also the time period is calculated net profit of the person need a formula that will be made all the calculations.
- Net earnings (PE) of the enterprise can be determined if you know the figures presented gross profit (EP), the financial profit (FP), the amount of tax (CH) paid during the period, other operating profit (OP).
- To calculate the net income is most often used the following simple formula
PP = VP + FP + OP - CH
- calculation of net income requires the data contained in the financial statements.
- Determination of gross margins requires revenue data presented for the defined period and the cost of production.To get the gross profit of the first indicators need to subtract a second.
- Operating profit is defined as the difference of other operating income and expenses for the period.Financial profit is calculated by subtracting the cost of financial income, included in this category.
- After calculating all the required parameters can be determined and the net profit.In the event that the net profit shows a figure with the sign "-" it can be stated that the company has worked at a loss.
net profit could now be used for any purpose.In most cases, by management net profit directed to the payment of expenses incurred by the company at the current time.Quite often, the net profit is accumulated or used for charitable purposes.
