How to calculate gross income
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Gross income means the total annual income of the company, expressed in monetary terms and received as a result of production, as well as sales of products. Thus, it is gross income that can characterize the final result of a firm.
Instruction manual
1
Define the value of gross income in the form of the difference between the cash proceeds received from the sale of goods and the material costs of their production.
2
Summarize the total value of the product produced per year per year, or the total value added. In turn, value added is the amount added to the total value of output at each subsequent production stage. In addition, at each production stage a certain proportion of depreciation of equipment is added, as well as the cost of rent.
3
Calculate the size of the gross income of the company per unit of output. It depends on the number of sold production results (goods) and on the price of each specific type of product. In this case, the process of generating gross income for one type of product can be calculated by the formula:
D = CxQ, where
D - an indicator of the income of the enterprise;
C - the value of the sale price of products;
Q is the quantity of products sold.
4
Calculate the sum of all indicators included in gross income: total income received from the sale of goods, including service and auxiliary industries; income from securities; income from various (insurance, banking) operations carried out to provide financial services.
5
Calculate the adjusted gross income, which is the amount of gross income reduced by the amount of value added taxes, excise duty and other income.
6
Calculate your gross income using the formula:
C + log + G + NX, where
C is an indicator of consumer spending;
lg - company investment amount;
G - procurement of goods;
NX - net exports.
Thus, the costs listed in this case are GDP and reflect the market value of production for the year.
