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Why is Net Income on bottom line of Profit and Loss statement negative?
Wiki User
∙ 10y ago
Negative net income means that business has spend more and earn less in other words it is said that business has incurred more cost to earn less revenue in a fiscal year.
Wiki User
∙ 10y ago
Wiki User
∙ 10y agoNegative net income means that business has spend more and earn less in other words it is said that business has incurred more cost to earn less revenue in a fiscal year.
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Why is your Net Income on bottom line Profit and Loss statement is negative?
Net income is negative which means that either company has earn less revenue or have incurred more expenses then revenue earned.
What is the Difference entrepreneurial profit and accounting profit?
Accounting profit is simply the bottom line of a business income statement and is an absolute number, whereas an entrepreneurial profit uses the economic concept of opportunity cost. It is the profit that the entrepreneur would have earned if he or she had invested both time and money in some other enterprise.
Why are creditors interested in the income statement?
Creditors would interested in an income statement because it would show the potential for revenue. Creditors would be more likely to lend money to a company with a positive bottom line.
Is retain earning account is equal to profit or loss?
Profits and losses are determined via the income statement. When you close out the books for the year that profit or loss gets closed and becomes part of the retained earnings. A loss would decrease retained earning and a profit would increase it. Loosely put, the retained earnings account is a cummulation of all the profits and losses over the years (not counting any other things that affect the bottom line like dividends paid out and such)
What is top line vs bottom line?
Both of these terms come from the accounting document known as the income statement, or Profit/Loss account. Top line is the first line of that document, and bottom line is the last line in that document. When companies talk about the need to increase their top line, they are talking about the need to focus on generating/increasing sales. Bottom line efforts are usually aimed toward cost reduction to increase the margin and therefore increase the results.
Why is your Net Income on bottom line Profit and Loss statement is negative?
Net income is negative which means that either company has earn less revenue or have incurred more expenses then revenue earned.
What will you find on a income statement and balance sheet?
Current period profit or loss is shown on both financial statements - at the bottom of the Income Statement and in the Retained Earnings section of the Balance Sheet.
Which of the following is the bottom line on the income statement?
the net income
What is the bottom line on an income statement?
The bottom line of the income statement will either report the net profits or net losses. In regards reports the end result of an economic period of activity for a company or business. The bottom line determines the health of an organizations ability to generate profit - it is only the total revenues minus the expense to generate and reveals if a company is make a profit or it's expenses are too vast to generate profit. It is one of the key followed items and compared frequently in various time period readings either weekly, monthly, quarterly and yearly to view specific changes either negative or positive affects of managing the affairs of business to be self sufficient the secondary next to the bottom line review is the statement of cash flows for monitoring business economic health to how this profit is generated and at what precise intervals.
What does the Profit and Loss statement indicates?
The statement of profit and loss follows a general format that begins with an entry for revenue and subtracts from revenue the costs of running the business, including cost of goods sold, operating expenses, tax expense and interest expense. The bottom line (literally and figuratively) is net income (profit).
What is the Difference entrepreneurial profit and accounting profit?
Accounting profit is simply the bottom line of a business income statement and is an absolute number, whereas an entrepreneurial profit uses the economic concept of opportunity cost. It is the profit that the entrepreneur would have earned if he or she had invested both time and money in some other enterprise.
Why does retained earnings go on an income statement?
Problem: Retained earnings is a balance sheet account. Therefore, you might not expect it to appear on an income statement. Explanation: A complete set of financial statements includes an income statement, a balance sheet, a statement of cash flows and a statement of retained earnings. But the statement of retained earnings can be very short (sometimes only 3 lines). As a convenience, it is frequently presented at the bottom of the income statement (Net Income + Beginning Retained Earnings - Dividends paid = Ending Retained earnings). One reason the Statement of Retained Earnings may be included on the Income Statement is that while the Income Statement only provides information about an entity's Net Income for one year, the Retained Earnings Statement provides the cumulative Income (that was not paid out in Dividends to stakeholders) since the entity began. * Net Income shows the growth of the business due to Profit for one year. * Retained Earnings show the growth of the business due to Profit since it began.
How can you determine the annual sales of a company by looking at the financial statements?
Generally sales are listed on the Income Statement. The Income Statement is the financial statement that the company uses to find it's Net Profit or Loss. This includes all sales, minus cost of goods sold, allowances for returns, expenses and other accounts that affect the bottom line.
The final figure on the income statement which shows the net income after taxes is better known as the?
bottom line
What is the difference between net profit and net income?
Net Profit and Net Income are interchangeable terms.I think all the taxes are include in Income. and in net profit means no any tax.Ex.,. my income is 100 rs and my net profit is 90..10 rs deduct in tax.I don't agree with you.net incomeDefinition 1In business, what remains after subtracting all the costs(namely, business, depreciation, interest, and taxes) from a company's revenues. Net income is sometimes called the bottom line. also called earnings or net profit.Definition 2For an individual, gross income minus taxes, allowances, and deductions. An individual's net income is used to determine how much income tax is owed.net profitDefinitionOften referred to as the bottom line, net profit is calculated by subtracting a company's total expensesfrom total revenue, thus showing what the company has earned (or lost) in a given period of time (usually one year). also called net income or net earnings.In an Income statement / Profit or loss account, net profit is calculated after deducting tax (go through any annual report of an organization).(source: Investorwords.com)
Is profit the difference between earned income and cost?
Under current U.S. accounting standards, gross profit is the difference between net sales revenues and cost of goods sold over a given period of time. Net income is gross profit less all other business expenses incurred or paid during a particular period of time. Both gross profit and net income appear as separate line items on an income statement. Generally, the "bottom line" is net income after taxes. "Earned income" is an income tax concept which refers to income that comes from the taxpayer's sale of goods and services - so for an individual (who "sells" his labor to his employer in return for a paycheck), "earned income" would include wages, commissions and other compensation. Unearned income would include interest, dividends and other items that are not compensation.
An officer of Carson Company recently commented that when he receives the firm's financial statements He looks at just the bottom line of the income statement -- the line that shows the net income or?
An officer of Carson Company recently commented that when he receives the firm's financial statements. He looks at just the bottom line of the income statement -- the line that shows the net income or net loss for the period. He said that he does not bother with the rest of the income statement because "it's only the bottom line that counts." He also does not read the balance sheet. Do you think this manager is correct in the way he uses the financial statements? Why or why not?
