What Does Net Profit Or Loss Show?


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Shezan Shaikh answered
The term net profit is defined as the operating income less taxes and interest. It is the same as earnings or net income. Gross profit less selling costs and administrative overheads is defined as net profit. Taxes, interest, depreciation and other expenses are deducted from the amount of gross sales. It is also called the net earnings or the net income or the bottom line of the company. The profit that is left after all the expenses and deductions have been made is known as net profit.

The word net loss is defined as the amount of a loss. It is arrived at after making all the necessary deductions, such as salvage, other insurance and any other subrogation that an insurer is responsible for. It is defined as the amount of loss which is sustained by a reinsured person after the entire reinsurance amount, salvage and recoveries have been deducted.

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