Key Differences

In business and financial context, margin is defined as the distinction between production or acquisition of the product to the seller and its selling price. Gross Profit Margin implies a financial tool, employed to identify the financial health of the business, by depiction the amount of money left after deducting cost of production from the sales. On the contrary, net profit margin, is a financial metric determining the company's profitability, by exhibiting the percentage of revenue left … [Read more...]

Net profit can be understood as the profit arrived after working on all expenses (both cash and non-cash), interest, taxes, and losses. It is the actual profit received from business activities by the company during the accounting period. It is not exactly same as net income. Technically, net income is used to mean the actual amount remained with the firm after deducting dividend to the preference shareholders. In business parlance, both the two terms heard quite often. Many use the terms net … [Read more...]

Accounting information is reported in the form of a financial statement. The financial statement is the final outcome of the accounting process and is prepared as per the basic accounting principles, concepts and assumptions. It helps to draw conclusions on the company's profitability, efficiency, performance, and position. These are furnished in such a way that the users of financial statement can understand them easily and take decisions. It includes profit& loss account, balance sheet, … [Read more...]

Trial Balance is a part of the accounting process, which is a schedule of debit and credit balances taken from all the ledger accounts. As every transaction affect two sides, i.e. every debit has a corresponding credit and the reverse is also true. The total of debit and credit balances are equal in the trial balance. In contrast, the Balance Sheet is the statement that exhibits the company's financial position, by summarizing the assets, liabilities, and capital on a particular date. In … [Read more...]

Profit making is the main motto of every company. It works as an incentive to the entrepreneur for the risk taken by him, for running a business. It is like the fuel, which helps the business to survive, grow and expand in the long run. In business parlance, Net operating profit after tax, i.e. NOPAT, is the actual after-tax operating profit of the company or in simple terms, it is the earning of the company after interest and tax. Net Income, on the other hand, refers to the actual profit … [Read more...]

Cash flow Statement is as important as the other two parts (Profit & Loss Account and Balance Sheet) of the accounting information furnished in the form of financial statements at the end of the financial year. It is the statement which describes the flow of cash and cash equivalents in and out the organization. The statement is helpful to the stakeholders or say interested parties, in learning about the sources and uses of the company's cash during a particular financial year, from … [Read more...]

Balance Sheet, or otherwise known as position statement, is a statement which shows the financial position of the company on a specific date. It lists all the ownership, i.e. assets and owings, i.e. liabilities of the company. Profit & Loss Account, on the other hand, also known as income statement is the account that shows the revenue earned and expenses sustained by the company, during the course of business, in a financial year. The two statements are an integral part of the financial … [Read more...]