Well, the bill is all the money that goes into the company, right? But the deal didn't keep all of that amount, because there were bills to pay. Imagine a company making a lot of money a month, but its operating costs outweigh the entry. What was the result? That's right, the company will go bankrupt and be indebted. That's where the concept of profit comes in, which you need to understand and differentiate from billing. After all, in this way it is possible to maintain financial health, ensure the survival of the company. So, the advantage is actually free money after paying for expenses. Next, let's understand how to calculate it!

To find out what the gross profit was, you would basically subtract the cost from the total bill amount. So the formula is: total revenue minus costs. Example: You spend $100 to get a product and sell it for $400. Your gross profit is $300. Should these calculation costs be linked directly to production, combined? You will take into account everything you spend to produce your service or product and take that amount from how much you charge it. In the case of multiple products and services, multiply it. Calculating the profit margin (the percentage of product price that matches the profit) is very important to ensure that the business has the resources to continue operating.

For net profit calculation, you will need gross profit. The idea is the same as the one we developed in billing.From the money that comes in as profit, there is still some value that does not go directly to the company's treasury: it is necessary to pay taxes and bear other costs that do not have to be related to the production of products. In gross profit you will reduce elements such as raw materials. In this case, the more you produce, the higher this cost, so we use variable costs in this calculation. As for calculating net income, you will also deduct other fixed costs, apart from taxes, taking into account all the money that comes out of the company. So, we have: - Net profit equals total revenue minus total costs. Well, we've come to the end of the text, and now you know how to determine whether the value you want to calculate is related to profit or collection. Thus, you can improve your financial analysis and make projections for making decisions. This information is very important, and all employers should understand it. So do your part: share this post on social media and let more people have access!