What is the difference between gross and net profit?

Answer by  nancy826 (81)

Gross profit is the total amount of sales. Net profit is the amount of sales less the cost of goods (or service) sold.

Answer by  Sasha79 (30)

Gross profit is everything you make at the end of a period of time without consideration to what you pay to keep the company up and running. Net profit is what you have left after deducting all expenses such as the rent for your buisness, taxes, employee benefits, toilet paper and other operating expenses otherwise known as overhead expenses.

Answer by  noonespecial (235)

Gross is the money that one gained without accounting for losses incurred. Net profit is the money that one made AFTER taking into account losses. So if I make 5 dollars selling lemonade, but spent 1 dollar buying lemons, my gross is 5 dollars, but my net is only 4.

Answer by  Rajamal (121)

Gross profit =[opening stock +purchase (purchase-purchase return)+direct expenses]-[sales (sales-sales return)+closing stock] net profit = [gross profit +incomes]-[expenditure]

Answer by  TheAnswerFairy (2345)

Gross profit is the amount of money made from a sale. If you sell a diamond ring for $500, then that $500 is your gross profit. Imagine that the seller had to pay $350 for the ring, plus there are labor costs involved. The net profit is what is left over when all those costs are subtracted from gross profits.

Answer by  Shan74 (41)

Gross profit is the profit you make from buying and reselling an item, only taking into account the money spent to purchase the item. Net profit is what is made after all other expenses (such as employee wages) are deducted from the money made, not just the purchase price.

Answer by  MikeG (1650)

Gross profit is the entire amount of profit you make before deducting any operating costs (Payroll, overhead, inventory) from the business. Net profit is what you take home after overhead, payroll etc. is paid, this is the dollar amount of profit the business has turned after everything is said and done.

Answer by  wennifred (597)

Gross profit is every penny that enters your till/account. Net profit is the money that's left over after all your expenses have been paid - including employees' pay, utility bills, costs associated with purchasing inventory or supplies, etc.

Answer by  hulmer (1067)

In short, your net profit relates directly to your gross profit before overheads, interests, or taxes are taken out for any amount of time. Net: After taxes, or "bring home" Gross: Before taxes.