Finance and accounting
Profit
The money left over after costs. Revenue minus cost.
Facts checked against sources onWhat does Profit mean?
Profit is what is left when you take everything a business earns (revenue) and subtract its costs. Profit = revenue minus cost. There are several levels of profit, depending on which costs are taken out: gross profit, operating profit (EBIT) and net income. If profit falls, either revenue fell, cost rose, or both moved the wrong way, so a good first split is revenue versus cost.
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Related terms
- RevenueMoney earned from sales, before costs.
- CostWhat it takes to make and sell the product in a period.
- Gross profit and gross marginRevenue minus the cost of goods sold, as an amount or a percent.
- EBIT and operating profitProfit from operations, before interest and tax.
- Net incomeProfit after every cost, including interest and tax.
- Fixed costA cost that stays the same when volume changes, within a normal range.
- Variable costA cost that rises and falls with how much you make.
- Semi-variable costA cost with a fixed part and a part that moves with volume.
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