What's the difference between net profit and operating profit?? And how do u calculate them??
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- Thread Starter
- 02-01-2013 21:09
- 03-01-2013 09:56
net profitn(Economics, Accounting & Finance / Accounting & Book-keeping) gross profit minus all operating costs not included in the calculation of gross profit, esp wages, overheads, and depreciation
To understand the what is the meaning of the operating profit margin, let us break it up as below.
Operating : This means we only include operational expenses in this calculation. Specifically, we exclude all costs associated with financing activities, including interest payments from debt and amortization of intangibles from acquisitions. We also exclude tax expenses from this metric, making this a "pre-tax" measure. Profit : This means we are calculating profits, i.e. what's left after subtracting expenses from sales. Margin : This means we are calculating operating profit as a percentage of sales.
Some extra help here sorry not further help i haven't covered this topic yet