What’s the difference between profit, net profit, Revenue, Net Operating revenue, current earning? And are there any terms that I should be aware of?
1 Like
Hi @lina80 that’s a good question!
@coachjasongolub do you mind jumping in?
@lina80
The difference between gross profit and net profit is when you subtract expenses. Gross profit is your business’s revenue minus the cost of goods sold. Net profit is your business’s revenue after subtracting all operating, interest, and tax expenses. Net operating revenue is more like cash flow (what you have in your account). Current earnings can mean many things and can confuse matters. Current earnings may include Accounts receivable and accounts payable.
1 Like
hi lina80, monica and coach jasongolub
refrencing The Architect Handbook of Professional Practice on page 415
The net profit mentioned in this paragraph refers to the total earnings of a firm after deducting all salaries and expenses from the net operating revenue. It represents the firm’s “bottom line” or the amount remaining after all financial obligations have been met.
In terms of taxes, the net profit typically refers to the profit before taxes are deducted. It’s the amount of money a company has earned from its normal business operations before paying taxes.
refencing the table on page 418 for profit to earnings ration, it quotes for net profit ( before distributions and tax)
on page 410
see terminology for
Net Profit vs Current Earnings
Net profit is before taxes
Current Earnings is after taxes have been deducted