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 ?
(3) We focus on the sole proprietorship type of firm since most textbooks assume this type of firm organization in presenting numerical examples of accounting and economic profit.
For every [pounds sterling]100 of revenue that Newcastle United earned between 2011-16 whilst in the Premier League, it achieved the highest level of economic profit in the division at [pounds sterling]6.33, which was 47% higher than the next most-efficient club Tottenham Hotspur.
For each business unit, require the reporting of full income statements, balance sheets, and cost of capital--allowing for the measurement of economic profit, economic profit growth, and even individual valuations as necessary.
Under competitive conditions, the producer does not make any economic profit since Total Cost is equal to Total Revenue.
Are they economic profits? The standard definition of economic profit is illustrated in Roger A.
When the gas cost reaches 1.6 Lt/[m.sup.3], and the price of a thermo-isolation material is at 420 Lt/ [m.sup.3] ([[lambda].sub.ds] =0.034 W/(mK)), a thermo-isolation of a building wall that has a pre-reconstruction thermal resistance of [R.sub.1] = 2 would result in a largest economic profit when the thermo-isolation material is 10 cm in thickness.
As Dwight Lee and I have argued (2000), on the one hand, the principal/agency problems embedded in the replacement of a formerly competitive market with a single firm ensure that production will be constrained, independent of any imposed restriction on production that the monopolist imposes to generate economic profits. On the other hand, unless internal coordination/agency costs are zero, the curb in production under monopoly cannot be as great as the standard model suggests.
He said that Lloyds enjoyed 20pc shares of the UK personal and small business markets, yet only accounted for 10pc of the total economic profits of the UK financial services market.
He pointed out that Lloyds enjoyed 20 per cent shares of the UK personal and small business markets, yet only accounted for ten per cent of the total economic profits of the UK financial services market.
When an industry settles into a long-term competitive equilibrium, all assets are expected to earn their opportunity cost of capital because any economic profits have already been driven away by competition in the industry in terms of expansion by existing firms or entrance by new firms.
They don't have much monopoly power, and any economic profits that they start making will be gobbled up by the hyenas real fast.
Yet the newspaper had charged "Thailand, which relishes saying that it has received the so-called refugees on humanitarian grounds, has done so because of economic profits and political favors it gained."

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