Contents tagged with Net Income

  • Gross income and net income

    Hello everybody,

    today I want to leave a note on gross income and net income from two standpoints: business and employee.

    Gross income = Total sales - Cost of goods sold

    Net Income = Total sales - Cost of goods sold - Selling expenses. 

    Because Gross income = Total sales - Cost of goods sold quite often Net income is recorded in this form:

    Net Income = Gross income - Selling expenses

    If some business had 1 000 000 $ sales and cost of goods sold is 600 000 $ and selling expenses are 250 000 then

    Gross income = 1 000 000 - 600 000 = 400 000

    Net Income = 400 000 - 250 000 = 150 000

    But if you are an employee, then for you differnet definitions are applied.

    Gross income = all salary … more