This type of profit is obtained by adding up all the above-mentioned receipts and expenses that relate to other activities of the organization. In other words, this indicator is the base for calculating tax deductions on profit or other taxes under other tax systems.
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Net profit
Net profit shows the results of the enterprise's activities in such areas as:
production;
trading;
entrepreneurial, etc.
This indicator represents the the benefit of using our student database profit that is formed during the reporting period after deducting all expenses and contributions. It is the net profit that remains at the disposal of the owners, and they can direct it to any goals, such as the development and modernization of production, employee bonuses, payment of dividends, etc. Usually, business owners already at the beginning of their entrepreneurial journey choose the main directions for distributing these amounts.
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Rules for calculating financial results
There are several simple rules for calculating a company's financial results:
The financial result of an organization's activities is the difference between income and expenses. If the result is positive, the result is called profit, and if it is negative, it is called loss. Accordingly, it is impossible to correlate profit with income, and loss with expenses. These indicators have a number of fundamental differences.
The meaning of the financial result may vary. Everything will depend on what specific income and expenses are taken into account in the calculation. For example, if all indicators are taken into account in the calculation, then at the output you have net profit/loss. If the calculation includes only data on the main types of activity, then you get profit/loss from sales (another name is the operating result of the activity).
The two above rules are not entirely correct when calculating retained earnings or uncovered loss from the balance sheet, since this is no longer just income minus expenses. This indicator indicates the amount of net profit/loss that the enterprise has accumulated over the entire period of operation, taking into account the adjustment for some transactions. This may be a decrease due to the payment of dividends, etc.
In most cases, it is impossible to correlate income and expenses with the inflow and outflow of cash. Accordingly, it is impossible to consider the financial result as the balance of money in accounts and in the cash register. This is occasionally possi