Question

MEDALSS PLZ HELP
Is gross profit or net profit more important to consider when you're deciding how successful and profitable a company is? Why?

Answer 1

I believe net profit is way more important to see id u have a successful company. I believe it because net profit is the final result of a sale of profit and you can actually add up and see if you have a successful business. Gross is like the 2nd step of the sell saying you buy a car for 10,000 sell for 15,000 your gross is 5,000 but you still got to include the lot rent and everything.

Answer 2

but i just wanted some additional comments to see if i got this right

Answer 3

Gross profit is sales revenues minus the cost of goods sold. The term net profit might have a variety of definitions. I assume that net profit means all revenues minus all expenses including the cost of goods sold, the selling, general, and administrative (SG&A) expenses, and the non-operating expenses.

Gross profit is before the government gets their hands on it. Net profit is what you are ahead after the taxes have been taken out or paid.