How to calculate the profit of the company

Depending on the scope of activities to calculate the profits of the enterprise may be easier or harder. So, if the enterprise is engaged in trade, the calculation of profit for him will be easier than for industrial enterprises. Universal counting could be conducted by considering the number of assets at the beginning and end of the reporting period. For this you need to separately count the different types of assets. First, it is wealth. These include materials not involved in the production of finished products, e.g. equipment and office equipment. This asset can be calculate as difference between the admission to the company of materials and their charges.

Next is the raw materials, i.e. the materials required for the direct production of finished products. It is believed by removing residues from warehouses and production. Count finished products cash in hand and in the Bank account of the firm. These are the main sources of profit of the enterprise.

In addition, it is important not to forget about the money in the cash register or on account of firms which are your partner granted you credit, is accountable to money and debt buyers. Then, to calculate the profit of the enterprise, it is worth considering the asset as debts to suppliers.

So, after considering and comparing all of the assets at the beginning and end of the period, you receive the total profit of the enterprise. But not always, the calculation ends, sometimes we need to learn balance, gross, tax and net profit of the enterprise. Most of the managers and shareholders of the enterprise are interested in is pure profit. It is calculated by deducting from retained earnings, which is total profitYu enterprisereceived during the period from all activities of the enterpriserecorded in the balance sheet, taxes, fees, contributions and other obligatory payments to the budget.