Net Profit or Loss in Accouting | Accounting Dictionary (2024)

FAQs

Net Profit or Loss in Accouting | Accounting Dictionary? ›

A net loss is when total expenses (including taxes, fees, interest, and depreciation) exceed the income or revenue produced for a given period of time. A net loss may be contrasted with a net profit, also known as after-tax income or net income.

Net Profit / Loss

It is the difference between the gross profit or loss and the total indirect income/expenses of a business. If the difference is a positive value, it's Net Profit, and if the difference is negative, then it's Net Loss for a business during a particular accounting period.

Typically, net income is synonymous with profit since it represents a company's final measure of profitability. Net income is also called net profit since it represents the net profit remaining after all expenses and costs are subtracted from revenue.

net profit in American English

noun. the actual profit made on a business transaction, sale, etc., or during a specific period of business activity, after deducting all costs from gross receipts.

A profit and loss (P&L) statement, also known as an income statement, is a financial statement that summarizes the revenues, costs, expenses, and profits/losses of a company during a specified period. These records provide information about a company's ability to generate revenues, manage costs, and make profits.

What is net profit? Net profit is the amount of money your business earns after deducting all operating, interest, and tax expenses over a given period of time.

Synonymous with net income, net profit is a company's total earnings after subtracting all expenses. Expenses subtracted include the costs of normal business operation as well as depreciation and taxes. Net profit is commonly referred to as a company's “bottom line” and is a true indicator of a company's profitability.

What does Gross and net profit mean? Gross profit is calculated as sales minus all costs directly related to those sales. Net profit is the actual profit after working expenses not included in the calculation of gross profit have been paid.

Net profit is what's left over after subtracting fixed expenses from gross profit. As interest rates have shown signs of weakening, this will help in keeping net profit levels higher than in the preceding half-year. A company's net profit is its profit after subtracting all costs.

Net profit is gross profit minus operating expenses and taxes. You can also think of it as total income minus all expenses.

What is another name for profit or loss? ›

A profit and loss statement (P&L), also called an income statement or statement of operations, is a financial report that shows a company's revenues, expenses and net profit or loss over a given period of time.

Answer and Explanation:

Another name for a profit and loss statement is the income statement. The income statement reports a company's net income at the bottom of the statement and, if it is positive, indicates a profit. If the statement shows a negative number, the company operated at a loss over the reported period.

A profit and loss statement is a financial report that shows how much your business has spent and earned over a specified time. It also shows whether you've made a profit or a loss over that time – hence the name.

Net Profit = Total Revenue – Total Expenses

To calculate Net profit of a company, its total expenses are deducted from the total revenue it generates.

The net loss formula can be calculated by subtracting revenue from expenses. For example, if a company's revenue was $100 and its expenses were $60, the company would have a net loss of $40. Since there is a total cost of $350,000, then the net loss would be $400,000.

To calculate net income for a business, start with a company's total revenue. From this figure, subtract the business's expenses and operating costs to calculate the business's earnings before tax. Deduct tax from this amount to find the NI.

Profit and loss account terms explained

Net income: This is your income minus the cost of goods sold, expenses and taxes. Gross profit: This is your total revenue / sales, minus the cost of those goods sold.