11 Matching Annotations
  1. Nov 2018
    1. Net sales = gross sales – (customer discounts, returns, and allowances) Gross profit = net sales – cost of goods sold Operating profit = gross profit – total operating expenses Net profit = operating profit – taxes – interest Net profit = net sales – cost of goods sold – operating expense – taxes – interest
    2. Another equation to calculate net income: Net sales = gross sales – (customer discounts + returns + allowances) Gross profit = net sales – cost of goods sold Gross profit percentage = [(net sales – cost of goods sold)/net sales] × 100%. Operating profit = gross profit – total operating expenses Net income = operating profit – taxes – interest
    3. Another equation to calculate net income: Net sales (revenue) - Cost of goods sold = Gross profit - SG&A expenses (combined costs of operating the company) - Research and development (R&D) = Earnings before interest, taxes, depreciation and amortization (EBITDA) - Depreciation and amortization = Earnings before interest and taxes (EBIT) - Interest expense (cost of borrowing money) = Earnings before taxes (EBT) - Tax expense = Net income (EAT)
    4. Here is how you reach net profit on a P&L (Profit & Loss) account: Sales revenue = price (of product) × quantity sold Gross profit = sales revenue − cost of sales and other direct costs Operating profit = gross profit − overheads and other indirect costs EBIT (earnings before interest and taxes) = operating profit + non-operating income Pretax profit (EBT, earnings before taxes) = operating profit − one off items and redundancy payments, staff restructuring − interest payable Net profit = Pre-tax profit − tax Retained earnings = Profit after tax − dividends

      $$Sales Revenue = (Price Of Product) - (Quantity Sold)$$

      $$Gross Profit = (Sales Revenue) - (Cost)$$

      $$Operating Profit = (Gross Profit) - (Overhead)$$

      Earnings Before Interest and Taxes (EBIT) $$EBIT = (Operating Profit) + (Non-Operating Income)$$ Earnings Before Taxes (EBT) $$EBT = (Operating Profit) - (One Off Items, Redundancy Payments, Staff Restructuring) - (Interest Payable$$

      $$Net Profit = (EBT) - (Tax)$$

      $$ Retained Earnings = (Net Profit) - (Dividends)$$

    5. Net profit is a measure of the fundamental profitability of the venture. "It is the revenues of the activity less the costs of the activity. The main complication is . . . when needs to be allocated" across ventures. "Almost by definition, overheads are costs that cannot be directly tied to any specific" project, product, or division

      Revenue - Cost

    6. Net profit: To calculate net profit for a venture (such as a company, division, or project), subtract all costs, including a fair share of total corporate overheads, from the gross revenues or turnover. Net profit = sales revenue − total costs
  2. Sep 2018
  3. Aug 2018
    1. legally obliged to return a profit

      legally obligated? they're definitely supposed to try or shareholders may move their money elsewhere, but why can't they create things for the common good as well?

  4. Jul 2016
    1. For-profits typically take those funds and spend way more on advertising and profit distribution than on teaching.

      Don’t know what the stats are for “non-profit universities and colleges” but it does feel like an increasing portion of their budgets go to marketing, advertising, PR, and strategic positioning (at least in the United States and Canada).

  5. Apr 2016
    1. business

      Right: But where this argument fails is in interrogating whether, and why, this must necessarily be the case. Many socially necessary functions are provided outside market structures. Is there an iron law of nature dictating that scholarly communication must happen in a marketplace?

    1. By valuing capital gains above all others, we end up extracting the value of our marketplaces and rendering them incapable of generating economic activity. As a Deloitte study showed, corporate profits over net worth have been decreasing for 75 years. Corporations are great at accumulating capital, but terrible at deploying it. They vacuum the money off the playing field altogether, impoverishing the markets and consumers–not to mention the employees–on whom they ultimately depend.