Gross Profit

Topics: Revenue, Generally Accepted Accounting Principles, Net income Pages: 7 (1877 words) Published: February 21, 2013
For personal income net of taxes, see disposable income.
"Bottom line" redirects here. For other uses, see Bottom line (disambiguation). Accountancy
Key concepts
Accountant Accounting period Accrual Bookkeeping Cash and accrual basis Cash flow forecasting Chart of accounts Convergence Journal Special journals Constant item purchasing power accounting Cost of goods sold Credit terms Debits and credits Double-entry system Mark-to-market accounting FIFO and LIFO GAAP / IFRS Management Accounting Principles General ledger Goodwill Historical cost Matching principle Revenue recognition Trial balance Fields of accounting

Cost Financial Forensic Fund Management Tax (U.S.)
Financial statements
Balance sheet
Cash flow statement Income statement Statement of retained earnings Notes Management discussion and analysis XBRL Auditing
Auditor's report Control self-assessment Financial audit GAAS / ISA Internal audit Sarbanes–Oxley Act Accounting qualifications

This article may contain original research. Please improve it by verifying the claims made and adding references. Statements consisting only of original research may be removed. (June 2012) In business, net income - also referred to as the bottom line, net profit, or net earnings - is an entity's income minus expenses for an accounting period.[1] It is computed as the residual of all revenues and gains over all expenses and losses for the period,[2] and has also been defined as the net increase in stockholder's equity that results from a company's operations.[3] In the context of the presentation of financial statements, the IFRS Foundation defines net income as synonymous with profit and loss.[1] Net income is a distinct accounting concept from profit. Profit is a term that "means different things to different people",[3] and different line items in a financial statement may carry the term "profit", such as gross profit and profit before tax.[1] In contrast, net income is a precisely defined term in accounting.[3] Contents  [hide] 

1 Overview
2 An equation for net income
3 References
4 See also

Net income can be distributed among holders of common stock as a dividend or held by the firm as an addition to retained earnings. As profit and earnings are used synonymously for income (also depending on UK and US usage), net earnings and net profit are commonly found as synonyms for net income. Often, the term income is substituted for net income, yet this is not preferred due to the possible ambiguity. Net income is informally called the bottom line because it is typically found on the last line of a company's income statement (a related term is top line, meaning revenue, which forms the first line of the account statement).

From Wikipedia, the free encyclopedia
Gross margin is the difference between revenue and cost before accounting for certain other costs. Generally, it is calculated as the selling price of an item, less the cost of goods sold (production or acquisition costs, essentially). Contents  [hide] 

1 Purpose
1.1 Percentage margins and unit margins
1.2 What is a unit?
2 Construction
3 References

The purpose of margins is "to determine the value of incremental sales, and to guide pricing and promotion decision."[1] "Margin on sales represents a key factor behind many of the most fundamental business considerations, including budgets and forecasts. All managers should, and generally do, know their approximate business margins. Managers differ widely, however, in the assumptions they use in calculating margins and in the ways they analyze and communicate these important figures."[1] [edit]Percentage margins and unit margins

Gross margin can be expressed as a percentage or in total financial terms. If the latter, it can be reported on a per-unit basis or on a per-period basis for a company. "Margin (on sales) is the difference between selling price...
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