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What is profit mean?

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Anonymous

9y ago
Updated: 5/2/2022

The term profit is loosely used, and it is hard to actually define profitability. One way to explain the meaning of profit would be to take the difference between the revenues from the goods sold and the cost of those goods. Example: You sell $100 worth of food that cost you $50 to get. Revenue = 100

Cost of goods = 50

= PROFIT = $50 I believe this is otherwise known as "Profit Margin" But businesses are faced with other expenses such as... the cost for a chef to make the food. Let's say it costs $20 Chef/Kitchen expense: $20 PROFIT AFTER ALL EXPENSES: $30 Profit after all expenses is better known as Net Income. As you can see, it is hard to actually distinguish what profit is... and I believe that the most agreed upon answer would be Revenue-COST OF GOODS and does not include any expenses afterwards such as kitchen expense.

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Dallas Weissnat

Lvl 10
3y ago

What else can I help you with?