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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