Distinguishing gross profits operating profits net profits
Topic A: Profits/Profit and Loss Statement
In this week’s material, we learned about the different types of profit. In this discussion, we will determine a company’s profitability.
Topic A: Initial Post
Distinguish among the following:
- Gross Profits
- Operating Profits
- Net Profits
Expert Solution
Gross Profits: Gross profits is the profit a firm makes after deducting the cost of goods sold (The cost of producing or acquiring goods to be sold by a firm)
Operating Profits: Operating cost is the profit a company makes from its core business operations or after deducting its operating expenses such as marketing and selling expenses, general and administrative expenses, and depreciation expenses.
Net Profits: Net income is the bottomline or the net income a business makes after paying for all expenses and taxes…Read more
References
Kato, N., & Kawamoto, T. (2016). Corporate Profits and Business Fixed Investment: Why are Firms So Cautious about Investment?. Bank of Japan Review, 1-7.
Chaudhuri, M., Voorhees, C. M., & Beck, J. M. (2019). The effects of loyalty program introduction and design on short-and long-term sales and gross profits. Journal of the Academy of Marketing Science, 47(4), 640-658.
Longnecker, J. G., Petty, W. J., Palich, L. E., & Hoy, F. (2019). Small Business Management: Launching & Growing Entrepreneurial Ventures 19th Edition. Cengage Learning.
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