Profit

Is it as simple as it sounds?

Similar to the word ‘net’, profit is often referred to alongside another word.

Profit is income less expenses.

Here are some examples.

Gross Profit – income less cost of sales

Net Profit – income less all expenses

Profit Margin – net income divided by net sales

Profit Centre –  a team within the business  responsible for producing profit.

The opposite to profit, is loss.

This is where expenses are greater than income over a period.

Retained earning is profit that has been left in the business as a source of funds.

If someone talks about profit, make sure to check which profit they are referring to as they can all mean very different things.

The aim of running a business is to make profit.

Being aware of the numbers and watching profit grow is part of the fun.

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