Answer :
Gross profit is calculated as revenue minus expenses directly related to production, while net profit is revenue minus all costs including taxes and interest. Option [A] is the answer.
Gross profit represents the amount of money a company makes from its core business activities after deducting the direct costs of goods sold. It does not include overhead expenses like taxes and interest. On the other hand, net profit reflects the overall profitability of a business by subtracting all expenses, including taxes and interest, from the total revenue. Net profit provides a comprehensive view of a company's financial performance after considering all costs incurred in generating revenue.
Understanding the distinction between gross and net profit is essential for assessing a company's operational efficiency and financial health accurately. While gross profit focuses on production costs, net profit provides a broader perspective by incorporating all expenses. The correct answer is option [A].
