Total profit, also called gross profit, is calculated by taking the total received from sales and subtracting the cost of the goods sold. It does not include expenditures, such as insurance and taxes. Gross profit is used to calculate the gross profit margin.Know More
This is all the money the business made by selling products and services. Take all the money received by customers, and add it up. If a company sells Item A for $10, Item B for $5 and Item C for $15, the total revenue is $35.
The cost includes items that were directly involved in the production of the item, such as materials, shipping costs and merchant fees. It does not include overhead items, such as office supplies, administrative costs, legal fees or rent payments. If Item A costs the company $5 to make, sell and ship, Item B costs $2 and Item C costs $10, then the cost of the total goods is $17.
The difference is the company's total profit. In the example, $35 minus $17 is $18, so $18 is the total profit. This number is then used to calculate the gross profit margin, a measurement of operating efficiency, by taking the gross profit and dividing it by the total revenue. For example, it is $18 divided by $35 for a profit margin of 51 percent.
The reserve ratio is calculated by finding the ratio between the amount of funds held by a financial institution and the total amount of liabilities carried by the institution, according to the Board of Governors of the Federal Reserve System. The ratio can be found by dividing the numbers.Full Answer >
The cost of goods purchased is calculated by subtracting the cost of goods sold from the cost of sales. Figuring out the cost of goods purchased is valuable for many businesses because it reflects whether or not a business has spent too much money on inventory. In addition, the cost of goods purchased is a useful tool for determining how much product needs to be sold to make a profit.Full Answer >
Executor fees are calculated as a percentage of the probate estate. The larger the estate, the lower the percentage paid to the executor. Percentages vary between jurisdictions, but they generally range from 0.5 to 6 percent of the estate, according to the law firm Fromhold, Jaffe & Adams.Full Answer >
Operating profit only covers the gross profit, minus direct operating expenses for the company while net profit includes all gains and losses by the company, including tax payments. Operating profits do not cover taxes paid, company assets sold or expenses not related to the company's operating costs. Net profit is the amount of money that the company has added or lost from its overall assets.Full Answer >