How to calculate the total profit?
In the world of commerce, we distinguish between the concepts of profit gross and profit net, which are calculated as follows: profit gross = selling price of the product/service – cost price. profit net = profit gross – (expenses + depreciation of assets + provisions)
For an existing business, the turnover (CA) is the sum of the amounts of sales (goods or services) made during an accounting period. Its formula is simple, just multiply the quantity of goods or services sold by the selling price: CA = selling price x quantities sold.
the net profit measures the net profitability of a company. We calculated subtracting all expenses and taxes from business income. For this reason, the net profit is often referred to as “result net“.
The profit earned by a business is actually the difference between income and expenses. Each year, the accounting department is responsible for calculating the profit of the company, in order to know if it has made a profit. If the result is positive, it means that the company has made a profit margin.
However, VSEs and SMEs whose turnover excluding VAT is less than euros can benefit from a reduced rate of 15% on the first 38,120 euros of profit. The net profit therefore corresponds to what remains after the taxes have been paid. Gross profit and net profit are therefore not calculated in the same way.
In addition, the profit calculation lets you know if your business is doing well and your items are selling well. It also makes it possible to determine whether or not the strategy adopted is the right one.
Profit is the amount the company actually earned. The result is an accounting term. If it is positive, we speak of profit. If it is negative, it is called a deficit or a loss.