profit

  

Definition

The surplus remaining after total costs are deducted from total revenue, and the basis on which tax is computed and dividend is paid. It is the best known measure of success in an enterprise.

Profit is reflected in reduction in liabilities, increase in assets, and/or increase in owners' equity. It furnishes resources for investing in future operations, and its absence may result in the extinction of a company. As an indicator of comparative performance, however, it is less valuable than return on investment (ROI).

Also called earnings, gain, or income.


Use profit in a sentence

  • When the company accountant finish counting that quarter's earnings, she realized they were more successful than anticipated and had earned a large profit.

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  • It is sad that most of the people in the world are looking for how they can profit off of other people and what they can get out of it for themselves.

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  • When you are running a business at the end of the day the main thing that matters is how much profit you were able to make.

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Notable Quotes

  • Profiting on Future Predictions
    "It's easier to predict the future than to create it, but it's more profitable to create it."
    - Tom Murcko
  • Are Management's Compensation Plans Aligned with Shareholder Interest?
    "It has become fashionable at public companies to describe almost every compensation plan as aligning the interests of management with those of shareholders. In our book, alignment means being a partner in both directions, not just on the upside. Many "alignment" plans flunk this basic test, being artful forms of "heads I win, tails you lose." A common form of misalignment occurs in the typical stock option arrangement, which does not periodically increase the option price to compensate for the fact that retained earnings are building up the wealth of the company. Indeed, the combination of a ten-year option, a low dividend payout, and compound interest can provide lush gains to a manager who has done no more than tread water in his job. A cynic might even note that when payments to owners are held down, the profit to the option-holding manager increases. I have yet to see this vital point spelled out in a proxy statement asking shareholders to approve an option plan."
    - Warren Buffett
  • 5 Criteria for a Profitable Online Business (1 of 5)
    "Strong demand for your product and service - Did you just create a product and tried selling it online and did not make even a single sales? Was your tactics wrong or was the product you were selling not worth buying at all. Many a times people sell stuff online that people can easily find down the street and the shopping centres. Instead you should look for an area that has a high demand for a particular product or service, you see when there is a huge problem that millions are looking for solutions and if your product gives that solutions, it’s bound to make you money cause the customers wants results."
    - Unknown



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