Total up all money taken in over a given time period (be it a week, month, or year, or any other). Before debiting expenses (also known as overhead) from this total, you will have a gross figure.
Once all expenses are subtracted from the gross, you will have the net profit calculated.
Suppose a retail business takes in $20,000 in one month. This is the gross.
But, this business likely has expenses relating to payroll, taxes, insurance, equipment payments, and utilities. Suppose these expenses total $15,000. The net profit is then only $5,000, once we've subtracted $15,000 from $20,000.
Once all expenses are subtracted from the gross, you will have the net profit calculated.
Suppose a retail business takes in $20,000 in one month. This is the gross.
But, this business likely has expenses relating to payroll, taxes, insurance, equipment payments, and utilities. Suppose these expenses total $15,000. The net profit is then only $5,000, once we've subtracted $15,000 from $20,000.
