How do you work out the net?

Answer 1

To determine your net profit , add up your annual expenses for the running of your business etc & subtract that figure from your gross profit.

Or you get the gross profit by adding your opening stock at the beginning of the year & your annual purchases , deduct your closing stock from this figure & subtract the resulting figure from your annual sales.

In simple words,

GROSS PROFIT = SALES less COST OF SALES.

(Cost of Sales covers all costs related directly to Sales)

NET PROFIT = TOTAL EXPENSES less TOTAL REVENUE