Good night world of accountants,\nI am writing up a business proposal and I am having a dilemma here regarding Gross vs net profit. I have calculated two possible scenarios under the plan.\n1. The net profit is what is left over after both Expenses and Loan repayments have been made.\n2. The net profit is what is left over not including the loan repayments only expenses. In this scenario the loan repayment is added to direct cost of sales reducing gross margin. \n\nOr are both my scenarios completely wrong?\n\nThanks for any advice that can be offered in rectifying this issue.