What is gross profit in simple words. Gross profit: formula and meaning

Hello! In this article we will talk about the gross profit of a business.

Today you will learn:

What is gross profit.
How does it differ from other types of profit?
What do its indicators say?
How to analyze gross profit indicators.

What is gross profit

In the course of its activities, any organization is faced with the need to form economic indicators. They are needed to evaluate the results of its work and identify. One of the main performance indicators of an enterprise is gross profit.

This concept combines profit from all areas of work, except production costs. The indicator value should be displayed in . It is compiled based on many indicators. All of them are divided into 2 groups. The first includes elements that depend on the leadership segment:

Reducing the cost of production.
Product sales performance ratio.
Indicator of growth in production volumes.
Carrying out activities aimed at improving product quality.
Application of production capacities at maximum speed.

Location of the enterprise.
The regulatory framework within which production or commercial activities are carried out.
The general political and economic state of the state.
Ecological and natural parameters.

Based on all of the above factors, the results of a business entity’s work are identified using gross profit. Unprofitable and profitable business activities are identified for subsequent analysis and the formation of profitable development paths.

How is gross profit different from other types?

Difference with gross income.

The concept of gross receipts (income) includes all the assets that the company received from its work. These include tax and other related payments included in the cost of sold assets. This indicator is formed not only on the basis of sales volume and cost of goods, but also taking into account demand, assortment, productivity and many secondary components.

Difference from net profit.

There is also a significant difference here. When calculating gross profit, the amount of tax deductions and other similar payments is not taken into account, as when determining net income. Gross profit is calculated before taxation, after which the amount of net profit is formed.

Difference with marginal profit.

Marginal income is directly related to the amount of variable costs, which are directly proportional to the production process. This includes the cost of materials, staff salaries, etc. Marginal profit is equal to the difference between the company’s income and irregular expenses.

The main difference between margins is that they help you develop the correct order of product release based on sales volume and assortment, as well as the most cost-effective way to break up your business. Gross profit reflects the profitability of the enterprise as a whole.

Difference from book profit.

Gross and book profit are quite similar indicators, however, there is a difference between them. The first coefficient is displayed on account 90, as the difference between costs and profit. The second is defined as account balance 99 - the total profit to .

How is gross profit recorded on the balance sheet?

Gross profit, as one of the indicators of the company's performance, is recorded in line 2100 of the income and loss report. The value of this line is calculated by deducting cost from item 2110 from revenue from item 2120. The coefficient can be positive or negative. If a negative indicator is obtained during the work, then this is a loss, which is displayed in parentheses, without using the minus sign.

What does gross profit mean?

Further planning and organization of commercial activities directly depends on its size. A negative indicator indicates that the organization is not functioning properly. With its help, you can identify problem areas when expenses exceed the planned budget.

Reducing product costs or production costs is one method of increasing gross profit from sales. It is this that provides the opportunity for the subsequent development of the organization’s activities, the use of new technologies, investment in more efficient equipment, the correct consumption of material and labor resources, etc.

What does the gross profit ratio show?

The gross profit ratio also deserves increased attention. This is its ratio to the amount of revenue, which is fixed as a percentage. A high ratio indicates a large profit, plus there is complete control over all expenses. If it is expressed in low percentages, then this indicates a lack of proper control over the cost of goods and services.

The coefficient is often used in the process of general monitoring of the state of the enterprise, comparison of past periods of activity and forecasting of future work. In addition, it can be used to obtain detailed information about the company's performance compared to its competitors. This is a multifunctional indicator that is used in many areas of commercial activity.

Gross Profit Analysis

In economics, this indicator reflects the financial result in terms of production costs. Its peculiarity is that it includes commercial and administrative costs. For example, salaries, expenses in terms of signing agreements and contracts, as well as other institutional costs. The coefficient is derived as the difference between revenue and technological cost, which reflects shop expenses, purchases of materials and wages.

Each type of indicator is divided into narrower ones. The volume of profits of managers, which are directly related to the production process, is reflected in the technological cost.

What does the calculation formula look like?

In standard form, the formula for calculating gross profit looks like this:

GP = TR - TStekhn, Where

GP—gross profit;
TR—revenue;
TStekhn - technological cost.

How is gross profit analysis done?

After calculating the indicator, an analysis is carried out, including a study of the sources of gross profit and its subsequent application.

The process starts with an analysis of the dynamics of the total amount through the use of constituent components (horizontal approach). Next, complex changes included in gross profit are formed (vertical approach).

A more voluminous version of the analysis contains a detailed consideration of each component of profit and the factors affecting it. All of them are divided into two groups: external and internal.

External ones include transport, economic and natural conditions, the cost of materials used and the development coefficient of foreign economic activity. Internal ones are divided into categories 1 and 2 according to the magnitude of subordination.

The first category includes income from business activities, interest payable (receipts), operating income (expenses) and non-operating income (expenses). The second category includes the amount of gross output sold, its structure, cost and retail price. In addition to them, this section includes episodes of failure to comply with economic discipline: incorrect cost formation, non-compliance with working conditions, a decrease in the quality of manufactured and sold goods, etc.

In the process of planning to increase income, other components of accounting policies are also taken into account:

Correct debt write-off.
Implementation of the LIFO method when analyzing inventories - the last item registered is sold first.
Compilation of indicators for reducing intangible assets.
Reducing taxation through the introduction of a preferential system.
Reduced production costs.
Using dividends for the development of the company.
Competent approach to pricing.

Such analysis is necessary for proper management of net income. In the course of its analysis, the structure of the application of gross profit in dynamics is examined, the impact of each individual area on the complex indicator of income and the percentage of profitability is revealed.

Where to find a company's gross profit figures

The indicators are displayed in the financial statements, in account 90 “Sales”. To identify them for the selected period, loan volumes are compared with the debit indicators of this account in the direction of subaccounts. For example:

In this example, account 90/9 is closed each month by writing off the balance to account 99 “Profit and Loss”. A debit indicator for this account means that the result for the standard activities of the company is a gross loss, a credit indicator reflects gross profit during the reporting period. At the end of the year, subaccounts are written off under account 90.

Cost of sales or Cost of goods sold - COGS ). It should be kept in mind that Gross profit differs from operating profit (Profit before taxes, penalties and interest, interest on loans).

Net sales income is calculated as follows:

Net sales income = Total sales income − Cost of returned goods and discounts provided.

Gross profit is calculated:

Gross profit = Net sales income − Cost of products or services sold.

Gross profit should not be confused with Net profit:

Net profit = Gross profit − Sum of operating costs − Sum of taxes, penalties and fines, interest on loans

Cost of goods sold is calculated differently for manufacturing and trading.

In general, this indicator reflects the profit of the transaction, excluding indirect costs.

For retail, gross profit is revenue minus the cost of goods sold. For a manufacturer, direct costs are the costs of materials and other supplies to create the product. For example, the cost of electricity to run a machine is often considered a direct cost, while the cost of lighting a machine room is often considered an overhead cost. Wages can also be direct wages if workers are paid a price per unit of goods produced. For this reason, service industries that sell their services on an hourly basis often treat wages as a direct expense.

Gross profit is an important measure of profitability, but indirect costs must be taken into account when calculating net income.

Gross profit concept

Gross profit refers to the difference between the proceeds from the sale of an organization's products, goods, works or services and the costs of their production or purchase. The main purpose of the gross profit indicator is to determine the rationality of spending labor, material and other resources of a legal entity.

As a rule, the reporting period for determining the amount of gross profit is month, quarter, half year and year. But for internal economic analysis and management accounting, depending on the company’s goals, gross profit can be calculated over a shorter period - a week, 10 days, a decade.

The difference between gross profit and other financial performance indicators

The gross profit indicator differs significantly from gross income, net, marginal and balance sheet profit.

Difference from gross income

Gross revenue (income) represents all the funds that a company received from its activities. This figure includes tax and other similar payments included in the price of assets sold. The amount of gross revenue depends not only on the price and number of sales, but also on the product range, labor productivity, demand and other indicators.

Gross profit refers to the difference between the amount of revenue from all activities and the expenses associated with them.

Gross and net profit

There is a main difference between these indicators. When determining gross profit, in contrast to net profit, the amount of taxes, fees and other similar payments is not taken into account. First, gross profit is calculated. After this, by subtracting the amount of taxes and fees accrued by the enterprise, the amount of net profit is determined.

Difference from contribution margin

The concept of marginal profit is closely related to the concept of variable costs, which are directly proportional to production output. These are materials, wages of workers engaged in production and sales. Marginal profit is calculated as the difference between the organization's income and variable expenses.

Its main difference from gross is that with the help of this indicator it is possible to determine the optimal production output in terms of volume and range, the most cost-effective option for production development. Gross profit characterizes the success of the company as a whole.

Balance sheet and gross profit: the same thing?

How to Determine Gross Profit

Gross profit can be calculated in different ways. The easiest way to define it is as the difference between sales revenue and sales expenses. You can calculate gross profit based on the amount of turnover. This does three things:

turnover is multiplied by the estimated gross profit premium;
the resulting value is divided by 100;
The cost of sales is subtracted from the calculation result.

The estimated allowance is determined as follows:

the trade markup as a percentage is divided by 100;
the value of the trade markup as a percentage for the reporting period is added to the result obtained.

Indicators involved in determining gross profit

The indicators taken into account when determining gross profit will differ slightly depending on the type of activity of the economic entity.

Indicator	Manufacturing plant	Trading enterprise
Sales revenue	Products	Goods and paid services
		Fixed assets and intangible assets
	Products, goods, services of structural divisions	Securities
	Securities
Expenses for	Raw materials, materials, tools	Purchase of goods
		Transportation of goods
	Administrative expenses	Salary and contributions to funds
	Depreciation	Renting retail premises
	Overheads	For advertising and storage of goods
	Transportation of products	Other articles

Gross profit as a financial reporting indicator

Gross profit is shown in the income statement on line 2100. The value of this line is calculated by subtracting their cost on line 2120 from sales revenue on line 2110. The gross profit indicator can have either a positive or negative value. If, as a result of the organization’s activities, a negative gross profit is obtained, we are talking about a loss, which is written without the minus sign in parentheses.

For example, Raduga LLC is engaged in sewing workwear. The organization's reporting for the previous period contains the following data:

Gross profit is calculated by subtracting its cost from sales revenue: 50,000 – 40,000 = 10,000 rubles.

Gross profit accounting: postings

Account 90 “Sales” is used to reflect gross profit in accounting. To calculate the gross profit for the reporting period, you need to compare the loan turnover with the debit turnover of this account broken down by subaccounts.

Account 90/9 is closed monthly by writing off the balance to account 99 “Profits and losses”. A debit balance on account 90/9 means that the financial result for the normal activities of the enterprise was a gross loss, while a credit balance indicates gross profit for the month. At the end of the year, subaccounts are closed on account 90.

Account correspondence		Contents of the operation
Debit	Credit	Contents of the operation
90/9	99	Write-off of gross profit
90/1	90/9	Sales revenue
90/9	90/2	Cost of sales
90/9	90/3	VAT
90/9	90/4	Excise taxes
90/9	90/5	Sales tax
90/9	90/6	Export duties

Let's look at the example of reflecting product sales and the formation of gross profit in accounting accounts. The main activity of the enterprise is the production of light metal structures (medals, orders, badges, metal fittings). In 2016, products were sold for 1,180,000 rubles (including VAT of 180,000 rubles). The cost of production was 700,000 rubles. In accounting, the accountant reflected the sale as follows:

Dt62 Kt90/1 = 1180000 – shipment of products;
Dt90/2 Kt43 = 700000 – write-off of production costs;
Dt90/3 Kt68 = 180000 – VAT on shipped products;
Dt90/9 Kt90/2 = 700000 – account closure;
Dt90/9 Kt90/3 = 180000 – account closure;
Dt90/9 Kt99 = 300,000 – sales result.

Gross profit, EBIT and EBITDA - what do they have in common?

When analyzing the financial condition and economic activities of an organization, EBIT and EBITDA indicators are used in world practice. In the Russian Federation they are used mainly by the largest resource extraction companies (Lukoil, Gazprom, etc.). Among domestic small and medium-sized businesses, these indicators have not received much widespread and practical application.

Their difference from gross profit lies in the special “cleaning” of this indicator and the calculation algorithm.

EBIT and EBITDA are determined in Russia somewhat differently than under IFRS. In domestic practice, EBIT and gross profit are identical. EBIT is the difference between sales revenue and direct expenses. In the Russian Federation, when calculating it, you need to take into account the amount of net interest, income tax reimbursement and the balance of emergency expenses and income.

EBITDA = EBIT + depreciation.

Gross profit in economic analysis

Gross profit analysis is necessary for making important management decisions and developing an organization's strategy for the future. On the basis of this value, profitability of sales, capital turnover and a number of other important indicators characterizing the activities of an economic entity are determined. When conducting financial analysis, you can compare indicators obtained based on gross profit values for the period:

planned and actual;
previous and present (actual).

It is relevant to compare the indicator for the enterprise with the average value for the industry, as well as actual values with standard values.

Answers to pressing questions

Question No. 1. What is the difference between concepts such as gross income and gross profit?

Question No. 2. What factors affect gross profit?

The amount of gross profit depends on factors of two levels of internal nature:

first level – sales income, interest receivable and payable, operating and non-operating profit;
the second level is the cost of production, the structure of goods sold, sales volume and the purchase price of goods.

Gross profit is affected by product quality, correct pricing of goods, fines and economic sanctions. Gross profit is also influenced by external factors - geographical, political, natural. The management of an organization can easily influence internal factors. In relation to the influence of external factors, the choice of a flexible enterprise strategy capable of quickly changing is required.

Question No. 3. What transactions reflect the formation of gross profit in a retail trade organization?

When selling goods at retail, the accountant makes the following entries:

Dt50 Kt90 – cash received for the Goods sold;
Dt90/2 Kt41/2 – write-off of the cost of goods (sales price);
Dt90/2 Kt42 – trade margin of goods sold (the posting is reversed);
Dt90/3 Kt68 – VAT payable;
Dt90/3 Kt44 – write-off of distribution costs;
Dt90/9 Kt99 – financial result from sales.

Question No. 4. The trade organization has established the same percentage of trade margins for all product groups (20%). Revenue for the reporting period amounted to 1,500,000 rubles. How to correctly calculate the implemented enterprise overlay?

When a trade organization has established a single percentage of trade markup for all groups of goods, then to calculate gross income (realized overlay) you can use the method of determining by turnover (T), that is, by the total amount of sales revenue.

First of all, I determine the estimated trade margin:

Carrying out commercial or financial activities, any enterprise is faced with the need to determine certain economic indicators. They are needed to analyze labor results and identify their profitability. One of the main indicators is gross profit.

Gross profit is the total profit earned before all deductions and deductions are made. That is, it can be defined as an indicator of the excess of income over all. Gross profit includes depreciation of fixed capital and income received from property

Profit is the final result of the enterprise's activities. However, at the end of the reporting period a loss may be incurred. It may be a consequence of excess production costs or lower than planned income from the sale of goods and services. Therefore, correct calculation of indicators is the main condition for profitable activity.

Some costs are compensated at the expense of profits and are not classified as distribution costs. The total costs of the enterprise, which are part of distribution costs and paid out of profits, are usually called They exceed distribution costs. This is the difference between economic profit and gross profit. Before calculating gross profit, it is necessary to determine distribution costs. The difference between and these costs is the gross profit. The economic profit of the enterprise will differ from the gross profit by the amount of costs not included in distribution costs.

Therefore, any enterprise must strive to obtain economic profit, which is the final indicator of the total income received. It shows that the company covers its production costs and is able to independently finance further development.

There are many indicators of enterprise profitability and profit values. It is determined in percentages and levels. But gross profit is one of the main indicators. It determines the level of income received from the main activity. This is the amount of income from property, including fixed assets, total income received from all operations not related to sales, from which all expenses incurred as a result of these activities have been deducted.

This indicator fully reveals the results of all the activities of the enterprise. As a result, it is possible to determine unprofitable and profitable business operations. This provides an opportunity for economic analysis and determination of optimal development paths.

Economic analysis is very important in the activities of every enterprise, regardless of what services or goods it sells. Proper planning and organization of work depends on this. If performance indicators are negative, it is necessary to identify problem areas where costs exceeded those planned. Reducing the cost of products, that is, the costs of their production, is one of the ways to increase the gross profit from its sales. It is profit that makes it possible for the further development of the enterprise, the introduction of new technologies, the installation of new technological equipment and the rational use of material resources and labor. The correct additional investment of the profit received in the development of production pays off over time. The main thing is to be able to build a production process rationally and economically. To determine the benefits of organizing production, there are indicators of gross

- this is a parameter that displays the difference between the income received by the enterprise and the cost of goods (services) sold, but without deducting income tax.

Gross profit- this is the total income of the company, which is received over a fixed period of time. It takes into account the profit from all types of activities of the company (both production and non-production areas are taken into account) minus production costs. The calculated figure is recorded in the balance sheet.

Gross profit of the economy is an indicator that takes into account the difference between GDP and producers’ expenses associated with paying for imports, net taxes and employee wages. This parameter characterizes the income or loss received by the company from the production of products, before taking into account profits from property.

Gross Profit Analysis

To analyze gross profit, horizontal and vertical analysis of changes in income is done. In this case, all the results are entered into a special table, after which they are compiled and analyzed.

From the above example, it can be seen that the company’s activities are very successful. During the reporting year, we managed to achieve a positive balance in almost all indicators, except for non-operating profit (the latter decreased by almost three thousand rubles). The main growth is noticeable in such indicators as other operating income, and so on, if not for the increase in operating expenses and the increase in interest payable, then gross profit the company's price would be much higher.

Gross profit and its component are influenced by several main factors:

1. External factors:

Natural, transport, socio-economic conditions;
- cost of production resources;
- level of development of foreign economic relations and so on.

2. Internal factors can be divided into two types:

- first order factors– income from the sale of goods, interest receivable (paid), other and other unrealized income or expenses of the company;
- second order factors– products, structure of goods sold, sales volumes and prices set by the manufacturer.

In addition to those listed above, internal factors include nuances that are associated with violations of discipline during the operation of the enterprise - errors in setting prices, low quality products, violations of working conditions, economic sanctions and fines imposed.

Both categories of factors, both first and second order, directly affect the amount of gross profit. At the same time, 1st order factors are components of gross income, and 2nd order factors have a direct impact on sales income and, accordingly, the overall profit of the company.

In order to further increase the company's income, the following measures should be implemented:

Application of LIFO methodology in inventory valuation,
- tax reduction through the use of tax benefits;
- timely write-off of the company’s debts that are classified as bad;
- optimization of company costs;
- effective implementation of pricing policy;
- using shareholder dividends to optimize the company’s equipment and improve product quality;
- formation of standards that allow control.
Effective gross profit management and its application is well discussed in the flowchart given below

Components of gross profit

Profit is one of the main results of a company’s activities, which covers the needs of not only the company (in particular), but also the country’s budget in combination with other types of business. That is why it is so important for a businessman to determine not only the size, but also the composition of income. In this case, the total amount of profit of the company is called gross.

The main factors for the growth of gross profit include: increasing production volumes of certain products (services), reducing the cost per unit of goods, improving quality, expanding the range of products, and the effective use of all production factors available to the company. Particular attention should be paid to the growth of labor productivity, on which total production volumes depend.

There are also factors that do not depend on the “internal” work of the organization - features of state policy in the field of price regulation, the influence of transport, natural or technical conditions on the processes of selling products or their production. At the same time, all factors, both external and internal, influence the formation of gross profit.

Composition of gross income is the total profit of the company received in the process of doing business. The main part of the gross profit is income from the sale of commercial products, calculated using a simple formula - the total amount of revenue from the sale of goods (providing a service or performing work) “minus” excise taxes, VAT (value added), general for production and sales. At the same time, income from the sale of commercial products is the basis of gross profit.

In addition, in composition of gross income usually included:

Profit from the sale of other goods and services of a non-commercial nature. This may include funds received from automobile, rural or logging farms that are on the company’s balance sheet;
- profit from the sale of fixed assets and other material assets of the organization;
- non-operating profit taking into account the deduction of non-realized expenses. Essentially, this parameter displays the results of all company operations outside of the sales of manufactured products;
- income from the sale of company assets (shares, bonds), as well as derivatives instruments that are not in free circulation on the organized market.

Almost 95% of the company's gross income comes from the sale of commercial products. That's why it's so important to pay special attention to it.

In addition, the above factors, as a rule, affect the income from sales of products manufactured at the enterprise (services provided). However, some of them require the most detailed study.

On income received by selling goods, is influenced by changes in the balances of untimely sold products. The more such balances, the less the company's income. At the same time, the volume of unsold goods largely depends on a number of reasons. The most common is the production of goods in volumes greater than the company can sell. The peculiarity of unsold balances is that because of them the share of more valuable products may increase. As a result, the volume of unsold products will increase. To eliminate such problems, the manufacturer must make every effort to reduce the volume of residues, both in total and in numerical terms.

The amount of income from products sold is influenced by several main factors:

- change in the volume of production of a product to its sales. The more actively a product is sold on the market, the higher the company’s profit, and vice versa. There is a direct relationship here;
- change in product cost level. Unlike production volumes, which directly affect the company's income, increasing costs have the opposite effect. Here, the higher , the lower the manufacturer’s profit, and vice versa. That is why, when analyzing product costs, it is so important to reduce this parameter to a minimum. For this purpose, entire sets of measures are developed, plans are drawn up, cheaper raw materials are selected, and so on;
- cost of production. When setting a price, the manufacturer focuses on several main factors - the market value of such products, the cost of manufactured products, the level of demand for the product, its competitiveness, and so on. On the other hand, the cost can be influenced by factors independent of the company - this is the policy of monopolists in this area, and so on. At the same time, the price level largely depends on the timely modernization of production, its technical improvement, and so on;
- changes in the structure of manufactured and sold goods. The larger the share of a profitable product, the more income it will receive. Conversely, if the volume of low-profit products is too high, this may lead to a decrease in income.

Another important one gross profit component– income from the sale of other goods and services of a non-commercial nature. The share of this indicator in the gross profit is only a few percent. At the same time, the results of activities from other sales can be either with a positive or negative balance. Enterprises of trade organizations and agricultural enterprises that are on the balance sheet of the manufacturer can bring not only income, but also losses. As a result, your gross profit will vary.

Income from the sale of fixed assets and other property is also included in gross profit. In the process of conducting business, a company may develop surplus material assets, for example, due to changes in production volumes, problems in the supply system, failures in the sale of goods, and so on. As a result, the revenue received will be much lower than the purchase price. Consequently, selling excess goods can bring not only income, but also additional costs for the company. In relation to the sale of excess fixed assets, the income will be calculated as the difference between the cost of selling the product and the initial price of the assets, which does not take into account the inflation growth index.

Unrealized profit of the company minus unrealized expenses - although insignificant, it is part of the gross profit. This indicator may include exchange rate differences on foreign currency accounts in the case of transactions in foreign currency. Since 1998, such profits have also included the investor’s income from the execution of a production sharing agreement. In addition, unrealized profits include income from the provision of property for rent, equity participation in the life of other companies, payments on securities, and so on.

Calculation of gross profit

All activities for calculating gross profit must be carried out before calculating taxes. When filing Form C-EZ, gross income will be determined in addition to additional income, which will be discussed below.

In this case, the calculation should be made taking into account the type of enterprise:

1. Companies engaged in trading goods– category “Businesses that sell products”. To calculate gross income, it is necessary to determine the amount of total net profit. This is done according to form C (point three). To determine net revenue, it is necessary to subtract from the total amount of offsets all discounts and refunds during the company's operation. After this, the cost of products sold is subtracted from the amount of net income (term three) (displayed in line 4). The resulting difference is the company's gross profit.

2. Companies that sell services. If the enterprise belongs to the category “Businesses that sell services” and is engaged in the provision of services (without selling goods), then the gross income will be equal to the net revenue of the enterprise. The calculation in this case is made by deducting the total amount of returns and discounts from the total gross income. For the most part, enterprises that provide only services produce precisely according to this simplified scheme.

Before you start calculating gross profit, it is important to pay attention to the following aspects:

- gross revenue. At the end of each working day, it is necessary to check that everything related to credit and cash receipts is correctly reflected in the reporting. In this case, the volume of receipts can be tracked using installed cash registers. You also need to open a separate account with a banking institution and learn how to use invoices;
- collected sales tax. It is important to ensure that the reporting correctly indicates the amount of tax collected. The point is this. If buyers are charged local and state sales taxes (which the government collects from the seller), then all funds collected must be included in the total gross income;
- inventories(the indicator is estimated at the beginning of each current year). This parameter is compared with the price of the final profit for the previous year. If everything is normal, then the indicators should be identical;
- purchases. If in the course of business he buys any goods for personal use or transfer to family members, then the amount spent should be deducted from the cost of products sold;
- end-of-year inventories. Make sure that all inventory in the enterprise is kept in compliance with rules and regulations. In this case, a prerequisite is the use of the correct price formation method. Just an inventory form is sufficient to confirm all available inventory. Such forms can be purchased at the store. Their peculiarity is the presence of special columns in which data on the quantity, price and cost of each product is entered. On the form there is a place to record the data of the person who evaluated the goods, made calculations and checked their correctness. It is these forms that provide proof that the inventory was carried out correctly and without serious violations.

3. Checking the calculations performed. If the company is engaged in retail or wholesale sales, then recalculation will not take much time. All you need to do is divide gross income by net profit. The resulting figure is expressed as a percentage and shows the difference between the cost of goods sold and the nominal value.

4. Additional sources of gross profit. If the company receives income from sources that are not related to its core business, then the income must be recorded on line number 6 of Form C and added to gross income. The result of the summation is the gross income of the entrepreneur. If you use Form C-EZ for reporting, then profit should be recorded in line 1. For example, such income can include profit from offsets, tax refunds, transactions with scrap metal, and so on.

Gross profit tax

Gross profit- this is the amount of income from all transactions related to the sale of goods (services or works), including the sale of fixed assets, the sale of other property and profits from non-sales transactions. The total amount of expenses for these operations is subtracted from the resulting indicator.

Profit from the sale of products is the difference between the company’s total income from the sale of goods excluding excise duties and VAT (value added tax), as well as expenses on sales and production.

Companies that operate in the foreign economic sphere must deduct export duties when calculating. In addition, benefits provided to companies by law are also not subject to taxes.

To pay taxes, gross income may be reduced by the amount:

Profits from equity participation in the work of other companies. This does not include profits earned outside the country;
- profit in the form of dividends received on shares, as well as profit in the form of interest received by holders of state assets at all levels (including constituent entities of the Russian Federation and local governments);
- income from intermediary transactions. This is relevant if the income tax, which is deducted to the country’s budget, differs from the percentage that is deducted to the budget of the constituent entity of the Russian Federation;
- income from insurance operations (the condition is similar to the previous one);
- income from the sale of agricultural or hunting products;
- income from banking operations.

When calculating tax, companies can count on certain benefits. In particular, it is reduced by the amount:

Contributions to charity (no more than 5%),
- deductions for financing capital investments for industrial purposes and financing housing construction;
- contributions for the restoration or maintenance of social facilities;
- deductions aimed at carrying out research or design work, as well as transferred to funds for technological development or fundamental research.

Taking into account all the benefits listed above, the taxable amount can be reduced by more than half.

The income tax rate is reduced for companies that employ more than 50% disabled people. In addition, in the first two years, income tax is not paid by enterprises operating in the following areas of activity - food production, production and processing of agricultural products, production of consumer goods, production of medicines, medical equipment, construction of social, industrial, environmental and residential purposes. Benefits apply to those companies whose revenue from the above-mentioned activities is at least 70%