Question

What is the dollar and % change formula for net sales, gross profit, and net income

Answer 1

1, Net sales is the difference of gross sales and any other sales adjustments. (Sales returns, discounts, allowance)

Net sales = Gross sales - (sales return+discounts+ allowances if any)

Net sales % (year on year) = (Current Period Net sales - Prior Period Net Sales) / Prior Period Net sales * 100

2. Gross profit is the difference between the total revenue and the total cost of goods sold. Cost of goods sold is the direct cost incurred to produce the goods sold by the Company.

Gross profit = Total revenue - Cost of Goods sold.

Gross profit margin = (Total revenue - Cost of Goods sold) / Revenue * 100

3. Net income = Total revenue - total expenses

Total expenses includes all the direct costs, indirect costs, operating expenses like salaries and wages, maintenance and utilities, depreciation etc.

Net income percentage = Net income / total revenue * 100