During the 20th century, trade spread across the world, as it is the biggest source of livelihood for many people. Trade means exchange, the exchange of goods and services that take place in many markets. The markets include several options that allow the sellers to sell their goods.
What is profit :
The term “profits” means practically the difference between returns and costs, that means the profit from any project, whether commercial or industrial. There are differences in the concept of profit in depending on various types of projects, for example, the concept of profit in business is the difference between revenues and expenses or the difference between income and costs. In industrial projects, if it’s positive, it’s a profit, and if it’s negative, it’s a loss.
The profit concept can be explained as a fixed value or percentage of the selling price where the profit for retail is calculated as the difference between the wholesale price and the retail price. Therefore, the importance of calculating the profit values of the project is the most important step in the preparation of the project.
The basics to follow to calculate the profit ratio:
First: calculating the total value of the total revenue of the project
Second: calculating the total expenses
Third: deducting total expenditures from total revenues
Fourth: calculate the negative value of profit (net loss) and then follow up a report of the project income in terms of revenues and expenses
The basics to follow for the distribution of revenues and expenses :
First: calculating the value of the company’s net sales
Second: deduct sales costs to see net income
Third: deducting operating expenses, depreciation and taxes in order to obtain net profit