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Gross Profit = Sales + Opening Stock + Purchases + Direct Expenses - Closing Stock
Net Profit = Gross Profit Less Operating Expenses (Indirect Expenses) - Depreciation + Indirect Incomes
Contribution Margin = Total Sales Less Total Variable Cost.
GP:Sales-CGS
NP: GP-all expenses relating to business
CM: Sales-Variable portion of CGS
gross profit comes when we deduct operating expences but net profit comes after deduct all expences .
Gross Profit: All the Direct Expenses deduct from Sales ( Material Used + DIrect Labour + Overhead cost) which is direct related to product.
Net Profit: Sales Minus Direct Cost - Indirect Cost - Finance Cost - Tax + other Income = Net Profit
Contribution Margin: Sales Minus Variable Cost
GP: Sale Price - Selling Cost (Direct Cost attributed to goods sold)
NP: GP - Operating Expenses (Indirect Cost attributed to goods sold)
CM: Sale Price - Variable portion of Selling Cost. (Selling Cost comprises of Fixed cost and variable cost)
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