Profit gross

Possible numerators include the gross income net pretax income net after-tax income gross profit, ie, gross income minus book depreciation cash flow or net income. An average return value is selected by defining a typical or mature proof year as the basis of calculation. The denominator can be the original total investment, depreciated book-value investment, lifetime averaged investment, or fixed capital investment. 

FIG. 9-1 Relationship between annual costs, annual profits, and cash flows for a project. A d — annual depreciation allowance Acf — annual net cash flow after tax Ac/ = annual cash income Age = annual general expense Aqp = annual gross profit A/r = annual tax A e = annual manufacturing cost Avc/ = annual net cash income Avvp = annual net profit after taxes A/ p = annual net profit As = annual sales Apc = annual total cost (DCFRR) = discoiinted-cash-flow rate of return (NPV) = net present value. 

Absorption pricing is based on a normal annual production rate R. The gross profit per unit Acp/R is taken as a fixed percentage X of the fixed plus variable manufacturing costs given by the equation... 

Let us consider a change in annual production rate to ft -I- AR. In order to maintain the gross profit per unit as Acp/R, the sales price per unit of produc tion would need to be Cs Acs- For this case Eq. (9-210) can be written in the modified form... 

Direct materials cost Direct labor cost Overhead cost Manufacturing cost Revenue from sales Gross profit... 

Actual Costs versus Standard Costs Let us consider the sales, profits, and manufacduring-cost data in Table 9-40. The gross profit is 33,129 per period better than e)mected. Clearly, there is less incentive to investigate overall costs when the profit variance is favorable than if the profit were less than expected. However, standard costing enables an objective analysis of the data, whether good or bad, to be made. 

We notice that profit is obtained as the difference between two large cash sums and that variances of some 3 percent in manufacturing costs and sales revenue have resulted in a variance of some 33 percent in gross profit. 

After extraction of costs such as dealer discount distribution and freight (total about 30%) the net sales are 21 to 28 million a year. Since we calculated a cost price of about 13 dollars per kg phenylalanine (see Table 8.6 13 million per 1,000 tonnes), die gross profit will be 8 to 15 million dollars. 

Stage 3 From sales of capital goods to sector 2, firms in sector 1 are able to pay wage advances and use gross profits to purchase their own capital goods. 

Gross profit margin Net sales - cost of goods sold/sales 25-40%... 

Scherer, F. M. 2001. The Link between Gross Profitability and Pharmaceutical R D Spending. Health Affairs 20 216-220. 

These assumptions lead to a revenue of EUR 300,000/year and a gross profit of EUR 30,000/year for the supplier with a cost structure of the producer as described above leading to variable costs of EUR 195,000 and fixed costs of EUR 75,000. 

Plus Difference of gross profit for the supplier before and after imple-... 

Fair sharing" of added-value means that the added-value is shared by the partners equally and the loss of gross profit for the producer - compared to a conventional business model - is compensated if there is any. 

Gross profit with reduced volume minus amortisation of implementation minus operational costs of Chemical Leasing. This figure will always be negative. 

Gross profit after implementing Chemical Leasing 12,500... 

Gross profit before implementing Chemical Leasing 30,000... 

Fair sharing means in a first step that the loss of gross-profit of the producer has to be compensated, and in a second step that the added value should be shared equally between producer and user. This results in a fair revenue of the producer (= fair costs of the user). The calculation is shown in the following Table 11. 

Difference between gross profit before and after implementing Chemical Leasing according to Table 8 17,500... 

The gross profit of the producer after fair sharing of the added value and the difference compared to the situation before implementing Chemical Leasing is calculated as follows (Table 12). 

Gross profit after implementation of Chemical Leasing 32,750... 

The increase in efficiency of 10% leads to an increase of the gross-profit of the producer of 9.1% and a decrease of the cost of the user of 0.9%. The ratio of 10 1 results from the basic assumption of 10% gross-profit of the producer before the implementation of Chemical Leasing. 

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