What is the difference between gross profit, net profit & contribution
Margin?

Question

Yusuf Dalal · Answer

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.

MUHAMMAD YASIN GUJJAR · Answer

GP:Sales-CGS

NP: GP-all expenses relating to business

CM: Sales-Variable portion of CGS

Ali Elhaila · Answer

gross profit comes when we deduct operating expences but net profit comes after deduct all expences .

mohammed fazal ur rahman · Answer

Gp=sales
Net profit=sale
Cm=sales less variable cost

Abdul Rauf · Answer

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

Sameer Khan · Answer

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)