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Profit is calculated using the following formula:

            revenue  -  costs


There are different types of profit:

Gross profit is the revenue minus the direct costs.

Sales revenue

- Costs of sales

= Gross Profit

Operating profit is the gross profit minus the indirect costs.

- Overheads

= Operating profit

Pre-tax profits the operating profits plus any one-off items, e.g., redundancy payments.

+ One-off items

= Pre-tax profits

Profits after tax the profit that is left after corporation tax has been paid.

- Tax

= Profits after tax



E-mail Steve Margetts