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What does net of expenses mean?

Updated: 4/28/2022
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12y ago

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"Net of Expenses" means after expenses. It's rather vague, as some call "Depreciation and Amortization" an expense while others don't; "Interest on Debt" is an expense, etc. In an accounting example, most would say "Earnings Before Interest and Taxes (EBIT)" instead of "Net of Operating Expenses," due to each firm's ability to classify its expenses differently.

It can also be used to signal what an analyst has taken out versus what has been left in during calculation. For instance, if we look at an investment, and it earns a net risk-adjusted 5% return, this means that the return figure has been adjusted for the risk associated with the vehicle, but that expenses have not yet been deducted from it. This provides a bit less ambiguity than the accounting terminology.

Hope this helps! :-)

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Net profit is calculated by taking in calculation all expenses incurred by the firm in the fiscal year. So it includes all fixed expenses as well as variable expenses to calculate net profit.


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Yes, net income and net earnings is a businesses income minus the cost of goods sold, expenses, and taxes. These terms mean the exact same thing.


Does net loss occurs when expenses are less than revenue?

Net Income : When Revenue is greater than Expenses. Net loss : When Expenses are greater than Revenue. References : Basic Accounting (111) Book .


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Sales Less: Cost of sales Gross Profit Less: Admin Expenses Selling Expenses Other Expenses Net Profit


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To calculate net loss, subtract total expenses from total revenue. Net loss occurs when expenses exceed revenue, resulting in a negative value. The formula for net loss is: Net Loss = Total Revenue - Total Expenses.


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The amount by which revenue exceeds expenses. If expenses exceed revenue it is a net loss.


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