How to determine the net profit of the company

Remember that in accounting, the net profit reflected in account 99 "Profits and losses" is the ultimate financial result of the enterprise. Net profit is defined as the sum of profit (loss) from sales profit (loss) from other activities net of tax profit and fines and penalties for violation of tax legislation, if any.

The net profit is formed from the retained earnings, which can be calculated as the sum of profit from realization of products (works, services), profit from other operations, as well as the difference between revenues and expenses from non-operating activities.

Profit from sales is a big part of the balance sheet profit. It is defined as the difference between the revenue from sales of products and its total cost. In the amount of profit from sales is not included VAT. If the cost exceeds the value of goods sold, then the company is a loss. Note that revenue from product sales includes amounts received in payment of goods, works and services in Bank accounts and in cash Desk of the organization. The cost of production is the cost of its production and sales. This includes the cost of raw materials, cost of labour, rent, maintenance management personnel, maintenance and repair.

Profit from other sales is the balance of income and expenses from sales of products serving the utility and ancillary industries, not included in the volume of sales from the main activity. It also includes the financial results from realisation of excessive material values.

Of retained earnings you can generate the net profit. It is calculated as the difference between the book profitu taxable income and amount of taxes subject to be allocated to the enterprise benefits. Net profit remains at the disposal of the enterprise and can be used to increase the assets, pay dividends or reinvestment.