Profit Calculation at a pvt ltd coy

1697 views 1 replies

If a pvt ltd company hires someone on the basis of net profit sharing than how to calculate net profits which take care of the expected expenses toward future expension, contigencies or any other purpose. Is it right under corporate law to keep some % of gross profits for expension and contigencies etc? What % is normally assigned for these purposes and why?

Regards, Anil

Replies (1)

Dear Mr.Anil,

For the expected expenses toward future expension (Expansion),

1)the future expansion which is under plan in term of rupees needs to be worked out.

2) & Work out How this expansion is going to be funded. (Debt etc)

3) therefore, expenses related to funding like service charges, interest payment as well as principal repayment should be figured out.

4) overall percentage on above points should be worked out to know outflow of funds for future expansion.

5) and for how many years such out flow is going to take place.

6) and in how many years returns (inflow) are expected from that outflow.

7) Discounting of the same should be worked out based on weighted avg. cost in terms of percentage per annum.

 


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
01 June 2026
Audit, Taxation & Compliance Executive

R P S K & Associates

Nashik

CA Inter

View Details
Company
ARTICLESHIP 27 May 2026
CA Article Trainee

Rahul Dang & Associates-Chartered Accountants

Pune

CA Inter

View Details
Company
23 May 2026
Account Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
Featured 28 May 2026
SEMI QUALIFIED/ CA DROPOUTS/ ARTICLES

T R SOOD & CO

New Delhi

CA Inter

View Details
Company
ARTICLESHIP 23 May 2026
Article Assistants

Acupro Consulting

Gurgaon

CA Inter

View Details
Company
21 May 2026
Associate

PWC

Kolkata

CA

View Details
Company
26 May 2026
Audit executive

vdsr & co LLP

Chennai

CA Inter

View Details
Company
29 May 2026
Accounts assistant

Shubh Consultancy

Mumbai

Graduate (Any)

View Details