Profit represents the excess of income overCosts of production from the sale of any goods and services. This is one of the more important indicators of financial results in the economic activities of companies.
It is calculated in the form of the difference between the proceeds from the sale of the product and the amount of costs of certain factors of production in monetary terms.
Profit can be divided into a common (gross), clean,Accounting and economic. Gross (total, balance) profit is the difference between selling and the cost of goods or services sold. For retail trade, the total profit is revenue less the value of all sold products.
Net income is a part ofBalance profit of the firm, remaining at its disposal after payment of taxes, deductions, fees and other necessary payments to the budget. This profit is used to increase the company's current assets, the formation of reserves, funds and reinvestments in production.
Based on the volume of net profit, dividends are paid to the shareholders of the enterprise. At the same time, its volume depends on the direct from gross profit, as well as the amount of taxes.
Accounting profit is defined as the difference between income from sales (the amount of sales) and costs (costs) of the firm.
Economic profit is part of the netProfits remaining with the organization after deducting all the costs incurred, including the opportunity costs for the distribution of the owner's capital. In this case, in the case of a negative value of the amount of economic profit, there is a variant of the company's withdrawal from the market. It can be defined as the difference between the profitability of the value of invested capital and its weighted average value multiplied by its value.
This type of profit allows you to compareProfitability of the invested capital of the firm with the minimum necessary return to justify the expectations of investors, as well as express the result of the difference in monetary units.
From the indicator, which expresses the accounting profit,Economic profit differs only in that when it is determined, the value of all long-term and other interest obligations is taken into account. That is, accounting profit is more economic by the amount of alternative costs or costs of rejected opportunities.