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The gross profit of the enterprise includes c. How to calculate net income. Terms of issue and sale

Hello! In this article, we will talk about the gross profit of the enterprise.

Today you will learn:

What is gross profit.
How is it different from other types of income?
What do her scores say?
How is the analysis of gross profit indicators.

What is gross profit

In the course of its activities, any organization is faced with the need to form economic indicators. They are needed to evaluate the results of her work and identify. One of the main indicators of the company's work is gross profit.

This concept combines the profit from all areas of work, except for production costs. The indicator value should be displayed in . It is compiled on the basis of many indicators. All of them are divided into 2 groups. The first includes elements that depend on the management segment:

Reducing the value of the cost of production.
Product sales performance ratio.
An indicator of growth in production volumes.
Implementation of measures aimed at improving the quality of products.
Application of production capacities at maximum speed.

Location of the enterprise.
The regulatory framework within which production or commercial activities are carried out.
General political and economic state of the state.
Ecological and natural parameters.

Based on all of the above factors, with the help of gross profit, the results of the work of a business entity are revealed. Unprofitable and profitable business activities are determined for subsequent analysis and formation of profitable development paths.

How is gross profit different from other types

difference with gross income.

The concept of gross revenue (income) includes all the assets that the company received from work. These include tax and other related payments included in the cost of assets sold. This indicator is formed not only on the basis of sales volume and cost of goods, but also taking into account demand, assortment, productivity and many secondary components.

The difference with net income.

Here also exists significant difference. When calculating gross profit, the amount of tax deductions and other similar payments is not taken into account, as when determining income in a net form. Gross profit is calculated before tax, after which the amount of net profit is formed.

The difference with marginal profit.

Marginal income is directly related to the amount of variable costs, which are directly proportional to the production process. This includes the cost of materials, staff salaries, etc. The contribution margin is equal to the difference between the company's income and irregular expenses.

The key difference between margins is that they can help you develop the right order to release products based on sales volume and assortment, as well as the most cost-effective way to break up a business. Gross profit reflects the profitability of the enterprise as a whole.

The difference with the balance sheet profit.

Gross and balance sheet profit are quite similar indicators, however, there is a difference between them. The first coefficient is displayed on account 90, as the difference between costs and profits. The second is defined as the balance of account 99 - the total profit to.

How gross profit is recorded in the balance sheet

Gross profit, as one of the indicators of the results of the company's work, is recorded in line 2100 of the income statement. The value of this line is calculated using the deduction from revenue for item 2110 of the cost price from item 2120. The coefficient can be positive or negative. If a negative indicator is obtained in the course of work, then this is a loss, which is displayed in parentheses, without using a minus sign.

What is Gross Profit?

Further planning and organization of commercial activities directly depends on its size. A negative indicator indicates that the organization is not working properly. With its help, you can identify problem areas when expenses exceeded the planned budget.

Reducing the cost of production or the cost of its release is one of the methods to increase the gross profit from the sale. It is she who provides an opportunity for the subsequent development of the organization's activities, the use of new technologies, investment in more efficient equipment, the correct consumption of material, labor resources, etc.

What does the gross profit ratio show?

The gross profit ratio also deserves increased attention. This is its ratio with the amount of revenue, which is fixed as a percentage. A high ratio indicates a large profit, plus there is complete control over all costs. If it is expressed in low percentages, then this indicates a lack of proper control over the cost of goods and services.

The coefficient is often used in the process of general monitoring of the state of the enterprise, comparing past segments of activity and predicting future work. In addition, it can be used to obtain detailed information about the company's performance compared to its competitors. This is a multifunctional indicator that is used in many areas of business.

Gross margin analysis

In economics, this indicator reflects the financial result in the context of production costs. Its peculiarity is that it includes commercial and administrative costs. For example, salaries, expenses in the context of signing agreements and contracts, as well as other institutional costs. The coefficient is derived as the difference between the revenue and the technological cost, which reflects the workshop costs, the purchase of materials and wages.

Each type of indicators is divided into narrower ones. The amount of profit of managers who are directly related to the production process is reflected in the technological cost.

What does the calculation formula look like

AT standard form The formula for calculating gross profit looks like this:

GP = TR - TStech, where

GP - gross profit;
TR - revenue;
TStehn - technological cost.

How Gross Profit is Analyzed

After calculating the indicator, an analysis is carried out, including a study of the sources of gross profit formation and its subsequent application.

The process starts with an analysis of the dynamics of total amount through the use of constituent components (horizontal approach). Further, complex changes are formed, included in gross profit (vertical approach).

A more voluminous version of the analysis contains a detailed examination of each component of profit and the factors that affect it. All of them are divided into two groups: external and internal.

The external ones include transport, economic and natural conditions, the cost of materials used and the coefficient of development of foreign economic activity. Internal are divided among themselves into categories 1 and 2 according to the magnitude of subordination.

The first category includes income from commercial activities, interest payable (receipt), operating income (costs) and non-operating income (costs). The second category includes the amount of gross output sold, its structure, cost and retail price. In addition to them, this section includes episodes of non-fulfillment of economic discipline: incorrect formation of value, non-observance of working conditions, deterioration in the quality of manufactured and sold goods, etc.

In the process of planning for increasing income, other components of accounting policies are taken into account:

Proper debt relief.
The introduction of the LIFO method in the analysis of stocks - the product that was registered last is sold first.
Compilation of indicators of reduction of intangible assets.
Reducing taxation through the introduction of a preferential system.
Reducing production costs.
Use of dividends for the development of the company.
A smart approach to pricing.

Such an analysis is necessary for the proper management of net income. In the course of its analysis, the structure of the application of gross profit in dynamics, the impact of each individual direction on a comprehensive indicator of income, and the percentage of profitability are revealed.

Where to find the company's gross profit figures

Metrics are displayed in financial statements, in account 90 "Sales". To identify them for the selected period, the volumes of the loan are compared with the debit indicators of this account in the direction of sub-accounts. For example:

AT this example account 90/9 is closed every month by writing off the balance to account 99 "Profit and Loss". The debit indicator for this account means that the total for the standard activities of the company is the gross loss, the credit indicator shows the gross profit during the reporting period. At the end of the year, sub-accounts are written off on account 90.

Profit is the difference between the income from the sale of a product and the financial costs of its production. This is the most important economic indicator that reflects the efficiency economic activity enterprises. Let us consider in detail the types of profit and methods for calculating them, but we will immediately make a reservation that the terms “revenue” and “profit” should be distinguished.

The amount received after deducting the costs from the revenue is the profit. In this way, general formula profit calculation will look like this:

Profit = Revenue - Costs (in financial terms).

What is net profit

The net profit of the enterprise is the funds remaining from the balance sheet profit after deducting taxes, fees, deductions and other established payments to the budget. It is used to invest in the production process, to organize reserve funds and to increase. Its size depends on several factors:

tax burden on the organization, additional payments;
enterprise revenue;
etc.

How to Calculate Net Income

To do this, you must first perform the following operations:

Calculate all production costs (including material costs).
Calculate gross income (is the difference between the proceeds from the sale of funds and the cost of manufacturing products).
Now you can calculate your net income. The formula for its calculation is as follows:

Net profit \u003d Gross income - mandatory payments (and other payments).

What is gross profit

Gross profit is the difference between the amount received from the sale of a product and the cost of that product. The difference between gross and net is that gross is the profit that is received even before the deduction of mandatory deductions and deductions. It does not include the cost of paying taxes and other prescribed payments.

There are two categories of factors that affect gross margin. The first includes factors depending on the head of the organization:

growth rates of production volumes;
the effectiveness of the sale of goods;
expansion of the range;
implementation of measures aimed at improving the quality of goods;
cost reduction;
maximum use of production capacity;
conducting an effective marketing campaign.

External factors that cannot be influenced include:

geographical and territorial location;
ecological and natural conditions;
current legislature;
government measures to stimulate business;
political and economic situation in the state and other world powers;
external factors affecting the provision of the enterprise with resources and transport.

The formula for calculating gross profit is very simple. To get its value, it is necessary to subtract from the net income from the sale the cost of goods or services rendered:

VP \u003d BH - C,
where:
VP - gross profit;
BH - net income;
FROM - the cost of goods or services.

Net income in this case is the total sales revenue minus the amount of any discounts applied and the product returned.

What is Marginal Profit

Marginal profit is the difference between the revenue from the sale of a product and the variable costs. In this aspect, variable costs are considered to be all costs directly related to the production of a particular product. They include both the cost of raw materials and materials needed for production, as well as the salaries of employees, electricity costs and other costs - but only in the proportion that was spent on a particular product. Marginal profit makes it easy to produce any particular product or service. In addition, this indicator is also considered part of the revenue, from which net profit will be formed directly and fixed costs will be repaid.

Marginal analysis of manufactured products allows you to determine which products are the most profitable and which are not profitable to produce. The two main indicators that regulate marginal profit are price and variable costs. To increase marginal profit, you need to either sell or sell goods at a higher cost.

Marginal profit is calculated according to the following formula:

MP=OD-PZ,
where:
MP - marginal profit;
OD - total income;
PZ - variable costs.

What is operating income

Operating profit is the difference between gross income and operating expenses. In other words, operating income - this is the amount remaining after deducting depreciation, rent, payment for fuel and other current expenses from profit. Operating income does not exclude funds for taxes and loan overpayments.

It is calculated in general view, according to the following formula:

OP \u003d VP - KR - UR - PrR + PrD + Prts,
where:
OP- operating profit;
VP- gross profit;
KR- business expenses;
UR- administrative expenses;
PrR- other expenses;
PrD- other income;
Prts- interest payable.

In general, operating profit allows you to view the complex of costs and income of the enterprise as a whole, while at the same time giving you the opportunity to evaluate in detail the most profitable or, on the contrary, unprofitable budget columns. In addition, it makes it possible to finalize accounting documents to the balance sheet profit.

What is book profit

Balance sheet profit is the total profit of an organization recorded on its balance sheet for a specific period of time. Balance sheet profit combines income received from all types of production and non-production operations. Balance sheet income represents net income before taxes and other prescribed charges. The balance sheet profit indicator reflects the effectiveness of the strategy implemented at the enterprise and the effectiveness decisions taken guides.

To evaluate the implementation of the plan and compare with the indicators for past period balance analysis is carried out. This is necessary in order to establish the reasons for the non-fulfillment of the plan, identify shortcomings in the management system, find sources of losses and generate resources to increase profits.

The main elements forming the balance sheet profit are:

income (or damage) from the sale of goods;
income (or damage) from additional sales;
income (or damage) from non-sales operations.

Balance sheet profit can be easily obtained from operating, or vice versa. The formula for calculating it looks like this:

BP \u003d OP - Prts,
where:
BP — balance sheet profit;
OP - Operating profit;
Prts - interest payable.

General concept of revenue

Revenue is money received from the sale of goods or services. The activity of any enterprise is focused on obtaining revenue. The difference between revenue and profit is that profit is the difference between the revenue received and the production costs incurred. Revenue can come from several sources:

proceeds from the sale of goods received as a result of the activities of the organization. Sales revenue is the cash received from the sale of products for a certain period;
income from investments;
proceeds from financial transactions.

Total revenue is calculated by adding the funds received from all the above sources.

What is gross revenue

Gross revenue is the total Money received from the sale of goods, services and material assets. Most of the gross proceeds are funds received from the sale of products. Gross revenue is determined in the following form:

Gross revenue = Number of goods produced * Price of goods.

Gross revenue is not a decisive indicator, since it does not include expenses incurred. Gross revenue cannot be considered as separate element to evaluate the performance of the organization. Nevertheless, with a comprehensive assessment, gross revenue is of great importance.

Cost of sales or Cost of goods sold - COGS ). It should be borne in mind that Gross profit differs from operating profit (Profit before taxes, interest and penalties, interest on loans).

Net sales income is calculated as follows:

Net sales income = Total sales income − Cost of returned goods and discounts granted.

Gross profit is calculated:

Gross Profit = Net Sales Revenue − Cost of Goods or Services Sold.

Gross Profit should not be confused with Net Profit:

Net profit \u003d Gross profit − Sum of operating costs − Sum of taxes, penalties and fines, interest on loans

Cost of goods sold is calculated differently for manufacturing and retail.

In general, this indicator reflects the profit on the transaction, without taking into account indirect costs.

For retailers, gross profit is revenue less cost of goods sold. For the manufacturer, direct costs are the costs of materials and other expendable materials to create a product. For example, the cost of electricity to operate a machine is often considered a direct cost, while the cost of lighting a machine room is often considered an overhead. Wages can also be direct, if workers are paid the price per unit of goods produced. For this reason, service industries that sell their services on an hourly basis often treat wages as a direct cost.

Gross profit is an important indicator of profitability, but indirect costs must be taken into account when calculating net income.

What is the term "gross profit" used for?

As mentioned above, the term "gross profit" is interpreted as the total revenue of an enterprise received over a certain period of time. Here you should take into account the total amount of revenue, except for the costs associated with covering production costs. Information about the total amount received as a result entrepreneurial activity are reflected in the balance sheet. The difference between gross profit and net income is that the latter aspect includes expenses associated with tax deductions and other obligatory payments.

There are several factors that affect the final amount received as a result of entrepreneurial activity. These factors can be divided into two conditional categories. The first category of factors is related to the actions of the company's administration. Each entrepreneur independently controls the scale of his production. In order to achieve maximum results, measures are taken to reduce the costs associated with the production of goods and increase the volume of manufactured products. The amount of gross profit depends on the degree of sales efficiency, as well as the production scale of the enterprise. In order to get a steady income, it is necessary to constantly carry out various activities in order to improve the quality of manufactured products.

External factors that have an impact on the amount of revenue belong to the second category. In this matter, consideration should be given to:

Features of the laws on the basis of which the activities of the enterprise are carried out.
The state of the economy and the specific market segment to which the company's products belong.
Location of the enterprise.
Natural resources and ecology.

What is the difference between profit and income

Doing business involves understanding various economic subtleties. First of all, it is an awareness of the difference between income and profit. The term "income" is used to calculate the difference between the amount received from the sale of products (rendering services) and the cost of production. The total amount received as a result of such calculations is income. In the case when entrepreneurial activity is carried out only in the service market, the level of income is equal to the proceeds from the sold products and services rendered.

In order to calculate the profit received, it should be subtracted from the income received, an amount equal to the cost of obtaining it. This category of expenses includes insurance payments, wage hired employees, transportation costs and other types of payments. It is important to note that the level of income is positive value as opposed to profit. Negative meaning profit occurs when the level of production costs exceeds the total revenue.

Gross profit is the total income a firm earns in a given period of time.

The concepts of net and gross profit

In accounting, profit is divided into two categories: net and gross. Gross profit is the difference between revenue generated and production costs. These calculations should take into account various costs associated with the purchase of raw materials for production, tax deductions, employee salaries and other nuances. It should be emphasized that tax payments are made from gross profit.

Production costs are quite difficult to calculate, since many different nuances must be taken into account. Debts to creditors, insurance payments, penalties from inspection bodies and expenses associated with renting real estate are mandatory components of the calculations. The remaining amount after carrying out operations related to the implementation of all necessary payments is net profit.

Thus, the gross profit of the enterprise is the total amount that the entrepreneur has left after paying for production costs. In the case of commercial enterprises, this amount is based on the results of the sale of products. The gross profit of a firm operating in the service industry is the total amount from which all necessary expenses are deducted.

It should be noted that the methods for calculating the level of profit are regulated at the legislative level. These restrictions on the part of the state are aimed at streamlining settlements and creating equal tax conditions for each person engaged in entrepreneurial activity. Knowledge of these aspects and understanding of the term "gross profit" is explained by the fact that most of tax payments are made from the gross profit. Based on this fact, it is important to understand what expenses can be included in such calculations.

It differs from net, gross profit in that it includes the costs of paying taxes and other obligatory payments.

Settlement rules

It should be emphasized that the calculations of tax payments are carried out only after calculating the amount of gross profit. The latter is defined as the total amount plus additional profit. During preparation necessary calculations should take into account the activities of the enterprise:

Trade enterprises. First of all, the amount of total income is calculated. In order to get the amount of net profit, you will need to deduct from the total amount all the costs associated with the provision of discounts and the return of defective products. The costs associated with the cost of production are deducted from the amount received. The result obtained is the gross revenue of the enterprise.
Service companies. AT similar organizations gross revenue is equal to net income. In order to get the final amount, it is necessary to calculate the difference between the income received and the expenses associated with discounts and claims from customers.

In addition, during the calculations, you should focus on several nuances. First of all, you should check the correctness of the reflection of information in the reporting sheets related to the daily receipt of funds. This includes both cash and bank payments. You also need to pay attention to inventory. This indicator is assessed at the beginning of the year. The result obtained is compared with the amount of revenue for previous years.

The same indicator is evidence of the effectiveness of the enterprise.

Further, the costs of acquiring various inventory items are taken into account. It can be both official cars and real estate, and various items office furniture. This type spending, in without fail excluded from production cost calculations. After that, calculations of inventories at the end of the year are made. The need for these calculations is explained by the importance of identifying the fact of compliance with the requirements established by the state. In these calculations, it is necessary to use the pricing manuals. In order to confirm the size of inventory items, you will need to conduct an inventory.

The following is an analysis of the correctness of the calculations. In the case when the activity of the enterprise is based on retail or wholesale trade, such calculations take a short period of time. To obtain the required result, it is enough to divide the amount of gross profit by the net revenue. The interest received is the difference between the cost of inventory and the price tag when sold.

In conclusion, additional sources of revenue are taken into account. AT in the event that the enterprise receives income from sources not related to the main activity, this amount is added to the gross income. The result obtained is the gross revenue.

Gross profit calculation must be carried out before taxes are calculated

Calculation examples

There are several different formulas that are used in accounting to calculate the amount of gross income. In most cases, a simple formula is used:

"VP \u003d D - (C + Z)".

Let's look at what these abbreviations mean:

"VP" - the amount of gross income;
"D" - income received from the sale of goods;
"C" - the cost of production;
"Z" - additional expenses.

Gross profit calculation formula using the balance sheet:

"B" (p. 2110) - "SR" (p. 2120) = "VP", where:

"B" - revenue;
"CP" - cost of sales.

In order to make competent calculations, it will be necessary to analyze in detail all the expenses of the enterprise, including the costs associated with the cost of production.

Turnover-based calculations are used when different kinds produced goods, a single mark-up is established. It should be noted that the production of such calculations is quite convenient, since the value of the company's turnover is taken as the basis. The term "turnover" is used to characterize the final value of income, including VAT. In order to obtain the necessary data, you should:

"T * RN / 100-S \u003d VP", where:

"VP" - gross income;
"T" - the result of the turnover;
"C" - the cost of inventory items;
"RN" - estimated allowance.

To determine the estimated allowance, you will need to carry out the following operation: "T / 100 + T \u003d PH". The markup is calculated as a percentage.

Below we suggest that you familiarize yourself with how the gross profit of an enterprise is calculated using the example of the IE "Tsvetochek", whose activities are based on the production and sale of souvenirs. Below are the financial statements for the last few years based on the company's financial performance:

Based on the above formulas, we get that the income of the enterprise has increased by 30,000 rubles. Selected implementation strategy finished products enabled the increase in revenue. Finding new ways to develop the company can increase the bottom line in 2019.

To conduct a competent calculation of the size of the gross profit, it is required to study in detail all the cost items included in the cost of goods

How to avoid mistakes when making calculations

During the preparation of such calculations in order to determine the size of the gross proceeds, many people allow typical mistakes associated with incorrect product cost data. To prevent such errors, it is necessary to take into account the amount of VAT and budget payments. You should also note that some items are subject to write-off. This means that products that are not formally in the warehouse of the enterprise are registered as subject to sale. This alignment is evidence of the need for an inventory. It is necessary to carry out these actions after the sale of existing products.

You should also pay attention to the similarity of marginal and gross revenues. The mistake of many people is the opinion that these concepts are interchangeable. In reality, gross revenue is the difference between income and expenses (fixed and variable). When calculating marginal profit, only variable costs are taken into account. Since doing business involves various costs, the amount of gross revenue is much less than the marginal one. Fixed expenses include utility bills, rent, and other expenses.

The funds remaining as a result of payment of all operating expenses, including taxes, licenses and patents, are profits that can be used at the discretion of the entrepreneur.

The purpose of any company is to generate income. It can be calculated according to different indicators. There are such concepts as revenue, net profit. Gross profit is a key indicator of the company's performance. It allows you to analyze the production efficiency of the structure.

What is gross profit?

Gross profit is the difference between revenue and cost. Taxes are not deducted from these funds. By cost is meant:

product manufacturing costs: material costs, equipment maintenance;
acquisition spending finished product at the purchase price;
payment for electricity;
salary payments.

All these indicators constitute the technical cost.

IMPORTANT! VP is calculated for a specific period. The time frame depends on the company. The resulting figure is indicated in the balance sheet.

What affects VP?

Gross profit changes under the influence of external circumstances, such as:

the cost of transportation services,
natural, environmental factors,
socio-economic environment in which the company operates,
production resource costs
foreign economic contacts.

VP is also influenced by internal factors:

income from the sale of products,
other sources of income: investments, provision of services,
product cost,
demand for manufactured products, sales figures,
the cost of the product being produced.

Gross profit is also affected negative factors possible during the operation of the enterprise:

overestimated or underestimated cost of products sold;
low quality of goods;
disciplinary violations by employees of the enterprise, leading to losses;
fines and sanctions.

These factors can affect the size of gross profit directly and indirectly. Factors that affect the income from sales have an indirect influence.

Composition of gross profit

The VP may include the following financial resources:

profit from the sale of the company's products, services;
funds received from rural, logging farms;
income from the sale of the company's property: equipment and other facilities;
amounts received from transactions that are not included in the main list of the company's activities. For example, a store is engaged in the sale of goods. This is his main activity. However, the funds are spent on investments, the income from which relates to non-operating profit;
amounts received from the sale of shares.

The vast majority of VP, according to statistics, consists of income received from the main activity.

Formula to Calculate Gross Margin

Gross profit is calculated using the formula:

VP \u003d D - (S + W)

The following indicators appear in the formula:

VP - gross profit;
D - the number of products sold;
C - cost of production of goods;
Z - costs in production processes.

VP indicators can be calculated after the product has been produced and sold.

ATTENTION! Generally, gross profit is calculated once a year.

Example

The company manufactures electric kettles. Production costs are 20,000 rubles, costs - 10,000 rubles. 500 teapots were sold per day at a cost of 1000 rubles.

Calculations are carried out as follows: revenue per day is calculated. That is, the number of teapots sold is multiplied by their cost. We will receive 500,000 rubles. From this result, you need to subtract all costs, which, in aggregate, amount to 30,000 rubles. 30,000 rubles are deducted from 500,000. Gross profit will be 470,000 rubles.

Calculation features

The calculation of VP is distinguished by a number of nuances determined by the type of activity of the enterprise:

If the company specializes in the sale of products, it is required to deduct all expenses from the revenue, including discounts on goods, returns. subtracted from the amount received. The result of the calculations is the gross profit;
If an organization specializes in the provision of services, usually the calculations are carried out according to a simplified scheme. Their proceeds are deducted discounts and other expenses. The resulting net profit is also gross profit.

The main stages of the calculation are standard.

Why is gross value calculated?

Gross profit does not reflect the real income of the enterprise. This indicator includes a lot of extra expenses: payment for advertising, payment of salaries, rent. VP is required for other purposes. It is a narrow, not a general instrument. It is used to analyze the production resources of the enterprise. Correctly calculated indicators ensure the achievement of the following goals:

analysis of the difference between the cost of the product and the income from its sale;
determination of the optimal cost for a product or service;
competent measures for planning the company's activities;
problem identification and weaknesses enterprises.

Based on the analysis of the annual EP indicators, it is possible to track the economic growth of the enterprise, the results from the optimization of activities.

Reflection of VP in financial statements

From the financial statements it should be clear on the basis of which the gross profit is calculated. Consider the components of the calculation formula from the point of view of accounting:

"revenue" (line 2110);
"cost" (line 2120).

The fixation of the EP in the documents takes place taking into account the order of the Ministry of Finance, which determines accounting entries. Currency profit is indicated in line 2100.

How to increase gross profit?

Gross profit is a dynamic indicator. It is constantly changing depending on the activities of the company. The following activities help to increase the VP:

use of the LIFO technique in the analysis of stocks;
reduction of taxation with the help of benefits that are due to the enterprise;
regular write-off of bad debts from the balance sheet;
optimization of production processes aimed at reducing costs;
competent pricing policy, taking into account the demand for products and the overall market situation;
improving the quality of equipment to speed up the release of goods and improve their quality. Restoration or acquisition of equipment can be carried out at the expense of shareholders' dividends;
creation of reasonable standards to ensure control over intangible assets.

IMPORTANT! Gross profit is the indicator on the basis of which the planning of the enterprise's activities in the manufacturing sector can be carried out.

So.
Gross profit - the amount received after deducting the costs and cost of production. Determined by formula. The nuances of the calculation depend on the type of activity of the enterprise. The VP indicator is important for assessing the company's production resources. It is the basis for reasonable pricing. Gross profit is reflected in the financial statements using the appropriate entries established by the Order of the Ministry of Finance.

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The gross profit of the enterprise includes c. How to calculate net income. Terms of issue and sale

What is gross profit

How is gross profit different from other types

How gross profit is recorded in the balance sheet