BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Net profit reflects the amount of money you are left with after having paid all your allowable business expenses, while gross profit is the amount of money you are left with after deducting the cost of goods sold from revenue. You need to calculate gross profit to arrive at net profit.

Detailed explanation-2: -Gross income will almost always be a higher figure than net income, since gross profit has not accounted for various costs (e.g., taxes) and accounting charges (e.g., depreciation).

Detailed explanation-3: -The income statement lists a company’s revenues and expenses. When revenue is higher than expenses, the result of revenue minus expenses is called net income or profit. When expenses are higher than revenue, the result of revenue minus expenses is called net loss or loss.

Detailed explanation-4: -A net loss occurs when the sum total of expenses exceeds the total income or revenue generated by a business, project, transaction, or investment. Businesses would report a net loss on the income statement, effectively as a negative net profit.

Detailed explanation-5: -Net profit is gross profit minus operating expenses and taxes. You can also think of it as total income minus all expenses.