The difference between operating profit and net profit.

The difference between operating profit and net profit is income tax. Net profit is the profit after paying income tax on operating profit. More specifically, operating profit is the net profit after deducting the balance of non-operating income and expenditure and enterprise income tax. Details are as follows:

1, gross profit, the profit of main business is equal to operating income minus operating cost minus business tax and surcharges;

2. Operating profit is equal to gross profit minus sales expenses minus management expenses minus financial expenses minus asset impairment loss plus fair value change income plus investment income plus asset disposal income plus other income;

3, the total profit is equal to the operating profit plus non-operating income minus non-operating expenses;

4. Net profit is equal to total profit minus income tax expenses;

5. Non-operating income: refers to the income other than the operating profit of the enterprise. Non-operating income mainly includes: non-current assets damage and scrap income, debt restructuring income, government subsidies unrelated to the daily activities of enterprises, cash income, generally referring to cash income, inventory income from reducing management expenses, fixed assets income belonging to previous errors, donation income, etc. Non-operating expenses: refers to the expenses incurred by an enterprise outside its operating profit. Non-operating expenses mainly include: non-current assets damage and scrapping losses, debt restructuring losses, public welfare donation expenses, extraordinary losses, inventory losses and cash inventory losses are included in management expenses.

Legal basis: Article 166 of the Company Law of People's Republic of China (PRC).

When the company distributes the after-tax profit of the current year, it shall withdraw 10% of the profit and include it in the company's statutory reserve fund. If the accumulated amount of the statutory common reserve fund of the company is more than 50% of the registered capital of the company, it may not be withdrawn.

If the statutory reserve fund of the company is insufficient to make up for the losses of the previous year, the profits of the current year shall be used to make up for the losses before the statutory reserve fund is withdrawn in accordance with the provisions of the preceding paragraph. After the company withdraws the statutory reserve fund from the after-tax profits, it may also withdraw the reserve fund from the after-tax profits upon the resolution of the shareholders' meeting or general meeting.

After-tax profits of the company after making up losses and drawing provident fund shall be distributed by the limited liability company in accordance with the provisions of Article 34 of this Law; A joint stock limited company shall distribute shares according to the proportion of shares held by shareholders, except that the articles of association of a joint stock limited company stipulate that shares shall not be distributed according to the proportion of shares held.

If the shareholders' meeting, shareholders' general meeting or the board of directors violates the provisions of the preceding paragraph and distributes profits to shareholders before the company makes up losses and withdraws the statutory reserve fund, the shareholders must return the profits distributed in violation of the provisions to the company. The company's shares held by the company shall not be distributed.