profit

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Profit

Revenue minus cost. The amount one makes on a transaction.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Profit

A company's total revenue less its operating expenses, interest paid, depreciation, and taxes. For example, suppose a widget manufacturer earns $1,000,000 in total revenue. The widgets cost $200,000 to make and his administrative and payroll expenses total $250,000. He also must subtract $50,000 in depreciation on his widget manufacturing equipment and pay $200,000 in taxes. His net income is stated as: $1,000,000 - $200,000 - $250,000 - $50,000 - $200,000 = $300,000.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

profit

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Profit.

Profit, which is also called net income or earnings, is the money a business has left after it pays its operating expenses, taxes, and other current bills.

When you invest, profit is the amount you make when you sell an asset for a higher price than you paid for it. For example, if you buy a stock at $20 a share and sell it at $30 a share, your profit is $10 a share minus sales commission and capital gains tax if any.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

profit

the difference that arises when a firm's SALES REVENUE is greater than its total COSTS. GROSS PROFIT is the difference between SALES REVENUE and the COST OF SALES, while NET PROFIT is equal to gross profit less selling distribution, administration and financing costs. PROFIT AFTER TAX is the net profit attributable to shareholders after taxes have been paid.

Profit depends on two main factors:

  1. average profit margins or profit per £1 of sales. If costs increase the profit margins will be squeezed; if competition forces selling prices downward margins will be similarly squeezed, and vice versa;
  2. sales turnover. Any increase in sales value will tend to increase profits. See PROFIT AND LOSS ACCOUNT.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

profit

the difference that arises when a firm's TOTAL REVENUE is greater than its TOTAL COSTS. This definition of‘economic profit’ differs from that used conventionally by businessmen (accountingprofit) in that accounting profit takes into account only explicit costs. Economic profit can be viewed in terms of:
  1. the return accruing to enterprise owners (entrepreneurs) after the payment of all EXPLICIT COSTS (payments such as wages to outside factor-input suppliers) and all IMPLICIT COSTS (payments for the use of factor inputs - capital, labour - supplied by the owners themselves);
  2. a residual return to the owner(s) of a firm (an individual ENTREPRENEUR or group of SHAREHOLDERS) for providing capital and for risk-bearing;
  3. the ‘reward’ to entrepreneurs for organizing productive activity, for innovating new products, etc., and for risk taking;
  4. the prime mover of a PRIVATE ENTERPRISE ECONOMY serving to allocate resources between competing end uses in line with consumer demands;
  5. in aggregate terms, a source of income and thus included as part of NATIONAL INCOME. See also PROFIT MAXIMIZATION, NORMAL PROFIT, ABOVE-NORMAL PROFIT, RISK AND UNCERTAINTY, NATIONAL INCOME ACCOUNTS.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
This assumes an economic profit of [pounds sterling]3.3m for 2017-18, with a 2% growth rate for 10 years going forward, based on a current invested capital value of [pounds sterling]194.1m
Moreover, how the recent changes in Indian accounting practices (adoption of International Financial Reporting Standards) would enhance the transparency in disclosure of shareholders' value or economic profit offers another area of study.
With the economic profit of a firm being the net operating profit after tax minus the result of the capital employed multiplied by the average cost of capital it is therefore not surprising that the sample has a negative residual income for the period (Table 4).
Gross margin (GM) =TR- Total Variable cost (TVC) Economic profit = TR [explicit cost + implicit cost] Business profit = TR [explicit cost] Benefit cost ratio (BCR) = Economic profit/TC (When imputed cost is taken) Benefit cost ratio (BCR) = Business profit/TVC (When imputed cost is not taken)
--This indicator reflects the real economic profit achieved by the company after covering the operating and financial costs.
(6) Scitovsky then uses the diagram to show how the entrepreneur's economic profit is calculated, assuming her next best opportunity is total leisure.
For each business unit, establish an absolute requirement that it consistently earn at least its cost of capital (a positive economic profit each year), meaning that it must be creating and not destroying shareholder value.
Further support for the claim against transfer pricing rules is that counter-intuitively, transfer pricing inures to the benefit of the integrated producer by inflating accounting costs and permitting the producer to hide economic profit, thereby achieving a result undermining transfer pricing theory and regulation.
The meeting reviewed economic, trade and investment relations binding the two countries and means of promoting them, in addition to, discussing the possibility of the Sultanate to benefit from the Chinese experiences in conducting the economic profit study to exploit and develop areas through which the railways will cross according to the tracks and approved phases.
The researchers continue that the pharmaceutical industry is largely influenced by the desire for economic profit, and the touted benefits of various pharmaceuticals commonly have not been thoroughly evaluated for pediatric use.

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