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Net profit for a business is liability because it must be paid to equity holder and creditors.
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∙ 11y ago
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Net profit is a liability?
It is not because what makes you think what you have earned is not belonging to the company? with no profit, company will gone bankrupt easily if net profit is liability. if it is liability, who is the company owing the money to?
What is the effect on wrong treated revenue expenditure as capital expenditure?
The effects it would has on net profit and net asset is that there would be an increase in net profit and an increase in net asset as well
What is the effect on wrong treated capital expenditure as revenue expenditure?
The effects it would has on net profit and net asset is that there would be an increase in net profit and an increase in net asset as well
Why is net profit added back in capital on the liability side?
Because net profit is the increase in capital for the period of time, and must be added to capital to reflect its true value.
What is net liability?
Asset - Liability = Net Asset / Liability * Net Asset - When Asset is more than Liability * Net Liability - When Liability is more than Asset
Which is better gross profit or net profit?
net profit
What is a net margin?
The Net Profit Margin is an Expression of the Net Profit as a percentage of the Revenue, where the Net Profit is the Revenue minus all Expenses. The Net Profit Margin can be calculated in the following ways: Net Profit Margin = Net Profit/Revenue*100 [or] Net Profit Margin = (Revenue - all Expenses)/Revenue*100
Is net profit the same as net income?
Net profit is not the same as net income. There are many things that can be deducted on a tax return form from net profit that reduce net profit down to net income.
Net Profit calculation?
net profit is a profit after tax(PAT)
If net profit after tax is 64000 and sales is 720000 what is the net profit margin?
Net profit margin = 64000 / 720000 * 100 Net profit margin = 8.89%
Is net profit an asset or liability?
In a way profit could be considered an asset but its a stretch. Profit is term used to describe the earnings left over after you subtract the expenses related to the earning of that profit. The retained earnings would actually be the asset. The term profit is just a way to tell if your business is making money (or profitable) and doesn't really fall into the asset category. You will not see profits on a balance sheet rather you will see earnings.
Formula for net profit ratio?
Net Profit Margin = Net Profit/ Sales Revenue X 100
