What Is Dirty And Clean Profit? Check Out Understanding And How To Calculate It

Illustration (Photo: Pixabay/The Digital Artist)

YOGYAKARTA gross profit and net profit are terms used to describe the ratio of finance and profit margins. Well, to understand what gross profit and net profit are, see the following article.

Summarized from various sources, Wednesday, October 18, 2023, gross profit (gross profit) is the amount of net sales after deducting the cost of goods sold (HPP).

Simply put, gross profit is the profit earned by the company after reducing production costs.

The gross profit calculation formula does not include components of sales, administration and tax costs

In the business, gross profit is used to calculate the remaining amount of income that can be used to pay for these financing components.

Meanwhile, what is meant by net profit is gross profit which has been reduced by all types of costs, such as production costs, rental costs, salary costs, operational costs, taxes, and so on.

Net profit is generally referred to as bottom line, as the net profit position is always at the very bottom of the company's loss profit report.

There are a number of factors that affect gross profit and net profit, including:

It has been mentioned above that the calculation of gross profit does not include components of sales, administration, taxes, salary costs and so on.

How to calculate gross profit can be done with a simple formula, namely reducing income with HPP.

What is meant by HPP is the burden that is issued directly or indirectly for the purposes of producing goods and glory which is then traded or traded in a certain period.

The following is an example of the case of calculating gross profit:

Andra opened a pharmacy business. Based on the loss profit report in 2022, Andra pharmacy has an income of IDR 150,000,000. After calculating, the HPP from its pharmacy during 2022 was IDR 87,000,000. The question is, how much gross profit did Andra's Pharmacy earn in 2022?

Answer:

IDR 150,000,000-IDR 87,000,000 = IDR 63,000,000

So the gross profit obtained by Pharmacy Andra in 2022 is IDR 63,000,000.

Net profit is a gross profit minus costs, or expenses that have not been reduced from income.

Calculation of net profit usually includes several components, such as taxes, operational costs, interest (if there is a loan to the bank), shrinkage costs, and so on.

In simple terms, the calculation of net profit can be simplified by the following formulas:

Net Profit = Total Revenue Total Expenditures

Or

Net Profit = Gross Profit Fee

Here are examples of cases:

Pharmacy Andra has a gross profit from sales in 2022 of IDR 63,000,000. Its gross profit has not been reduced by other costs, such as taxes (IDR 6,200,000), store operating costs (IDR 3,000,000), loan loans to banks for a total of a year (IDR 12,000,000). How much net profit did Pharmacy Andra earn during 2022?

Answer:

Net profit = IDR 63,000,000 (IDR 6,200,000 + IDR 3,000,000 + IDR 12,000,000)

Net profit = IDR 63,000,000 IDR 21,200,000

Net profit = IDR 41,800,000

So the net profit obtained by Pharmacy Andra in 2022 is IDR 41,800,000

That's information about what gross profit and net profit are. Hopefully this article can add insight to the loyal readers of VOI.ID.