# Profit

Profit is the amount earned after allocating cost and expenses by individuals or in any business entity. Profit is calculated by deducting total expenses from total revenues. If a company is in profit then it is favorable for company.

Accounting profit formula is used to calculate profit that incurred after selling the goods. Profit can be defined as the difference between the cost price and the sale price of a product where sale price is always greater than the cost price. However in

Definition and Explanation of Target Profit: Target profit is the amount of net operating income or profit that management desires to achieve at the end of a business period. Management needs to know the required level of business activities to get target profits. Cost

Gross profit ratio (GP ratio) is the ratio of gross profit to net sales expressed as a percentage. It expresses the relationship between gross profit and sales. Components: The basic components for the calculation of gross profit ratio are gross profit and net sales.Net sales means that sales minus sales returns. Gross profit would be the difference betweennet sales and cost of goods sold. Cost of goods sold in

Gross Profit Analysis (GP Analysis): After studying this chapter you should be able to: Gross profit is the difference between the cost of goods sold and sales. Since the adherence of the actual to the budgeted or standard gross profit figure is highly desirable, a careful analysis of unexpected

Definition of net profit ratio: Net profit ratio is the ratio of net profit (after taxes) to net sales. It is expressed as percentage. Components of net profit ratio: The two basic components of the net profit ratio are the net profit and sales. The net profits are obtained