Profit

Profit is the surplus remaining when a business’s revenues exceed its costs over a specified period. Its amount depends on which costs and revenues are included.

Revenue: Revenue is income generated from an organization’s ordinary activities before expenses are deducted. Profit begins with revenue earned during the period.
Gross profit: Gross profit is revenue minus the direct costs of goods sold or services delivered. It shows the surplus before operating expenses and other charges.
Profit maximization: Profit maximization is the choice of actions intended to achieve the greatest possible profit under given constraints. It treats profit as a target for business decisions.
Economic profit: Economic profit is revenue minus both explicit costs and the opportunity costs of resources used. It can be lower than accounting profit because it includes forgone alternatives.
Business growth: Business growth is an increase in a firm’s scale, output, revenue, or market reach over time. Reinvested profit can fund expansion without new borrowing or ownership stakes.
Cost: A cost is the monetary value of resources used to produce goods or services or pursue an activity. Costs are deducted from revenue to calculate profit.
Operating income: Operating income is profit from ordinary business operations after operating expenses are deducted. It isolates operating performance before financing and income taxes.
Break-even point: The break-even point is the level of sales at which total revenue equals total costs. It marks the threshold beyond which a business begins to earn profit.
Accounting profit: Accounting profit is revenue minus expenses recognized under a specified accounting framework. It is the reported measure governed by financial accounting rules.
Capital accumulation: Capital accumulation is the increase in productive assets through investment and reinvestment. Retained profit can add to the funds available for investment.

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