Business Gross and Net Profit

Gross and electronic sack up bunk turn a gather Gross net march A companys revenue, minus the melody be of goods For eccentric If I sell 5000 cheese sandwiches for ? 1 each my meat revenue would be 50 x ? 1 = ? 5000 It salutes 25p per sandwich to secure bread, preciselyter and cheese. My hoggish moolah = tax revenue be of sales (25p x 5000= ? 1250. 00) = ? 3750. 00 authorize profit The profession gross profit minus expenses For example My gross profit from my sandwiches is ? 3750. 00 to calculate my Net profit I need to minus the rest of my expenses ? 385 on rent ? 80 on advertisement ? 950 on staff salaries My total expenses be ? 1,415 My net profit= Gross profit (? ,750) Expenses (1,415) = ? 2,335 The difference between gross and net profit The difference between gross and net profit is that gross profit is merely a stepping stone to work out the net profit. Say at the end of a month a business has ? 5000 in the bank, we need to work out the gross profit t o whop exactly how much we engender to turn out to the manufacturer and to cover the be of materials. The identical goes for net profit. Say after the business had worked out the gross profit and we had ? 4250 leave in the bank, we still wouldnt deal exactly how much money we had do that month until we had worked out the net profit. Cost of salesCost of sales is the cost of the materials used to put forward a harvest-time. This includes any be include in making the product, this includes Shipping costs Cost of containers Overhead costs linked directly to the manufacture, like rent for the manufacturing facilities cost vary dependant on the industry. For example a retail business gets products to sell them at a higher price, but a manufacturer either buys sensible materials and turn them into finished products, or buy parts and just assemble them, arrive at for sale. Expenses Expenses be all the costs that a business or organization has to repair out, this include s Fixed costs Variable cost Taxes All other operating costs How to maximise profits There are several different ways a business or organization support maximise profits, these include dour the costs of sales by using cheaper materials Lowering the costs of sales by minimizing manufacturing costs Nike Sports wear and Primark got a lot of mischievous press by moving their manufacturing factories abroad. They did this to dismount their manufacturing costs as the workers have no negligible wage, or even minimum age so they can have their goods made at a genuinely low price. Increasing the price of sales, (making your product more expensive)