Profit (accounting)
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Profit (accounting)
Profit, in accounting, is an income distributed to the ownership , owner in a Profit (economics) , profitable market production process (business). Profit is a measure of profitability which is the owner's major interest in the income-formation process of market production. There are several profit measures in common use. Income formation in market production is always a balance between income generation and income distribution. The income generated is always distributed to the Stakeholder (corporate), stakeholders of production as economic value within the review period. The profit is the share of income formation the owner is able to keep to themselves in the income distribution process. Profit is one of the major sources of economics , economic well-being because it means incomes and opportunities to develop production. The words "income", "profit" and "earnings" are synonyms in this context. Measurement of profit There are several important profit measures in common use. ...
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Economics
Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interactions of Agent (economics), economic agents and how economy, economies work. Microeconomics analyzes what's viewed as basic elements in the economy, including individual agents and market (economics), markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers. Macroeconomics analyzes the economy as a system where production, consumption, saving, and investment interact, and factors affecting it: employment of the resources of labour, capital, and land, currency inflation, economic growth, and public policies that have impact on glossary of economics, these elements. Other broad distinctions within economics include those between positive economics, desc ...
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Earnings Before Interest, Taxes, Depreciation, And Amortization
A company A company, abbreviated as co., is a legal entity representing an association of people, whether natural, legal or a mixture of both, with a specific objective. Company members share a common purpose and unite to achieve specific, declared ...'s earnings before interest, taxes, depreciation, and amortization (commonly abbreviated EBITDA, pronounced , , or ) is a measure of a company's profitability of the operating business only, thus before any effects of indebtedness, state-mandated payments, and costs required to maintain its asset base. It is derived by subtracting from revenues all costs of the operating business (e.g. wages, costs of raw materials, services ...) but not decline in asset value, cost of borrowing, lease expenses, and obligations to governments. Though often shown on an income statement An income statement or profit and loss accountProfessional English in Use - Finance, Cambridge University Press, p. 10 (also referred to as a ''profit ...
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Monopoly
A monopoly (from Greek language, Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situation where a specific person or company, enterprise is the only supplier of a particular thing. This contrasts with a monopsony which relates to a single entity's control of a Market (economics), market to purchase a good or service, and with oligopoly and duopoly which consists of a few sellers dominating a market. Monopolies are thus characterized by a lack of economic Competition (economics), competition to produce the good (economics), good or Service (economics), service, a lack of viable substitute goods, and the possibility of a high monopoly price well above the seller's marginal cost that leads to a high monopoly profit. The verb ''monopolise'' or ''monopolize'' refers to the ''process'' by which a company gains the ability to raise ...
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Economic Rent
In economics Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and intera ..., economic rent is any payment (in the context of a market transaction) to the owner of a factor of production In economics, factors of production, resources, or inputs are what is used in the production process to produce output (economics), output—that is, goods and service (economics), services. The utilized amounts of the various inputs determine the ... in excess of the cost needed to bring that factor into production. In classical economics, economic rent is any payment made (including imputed value) or benefit received for non-produced inputs such as location (land Land, also known as dry land, ground, or earth, is the solid terrestrial surface of the planet Earth that is not submerged by the ocean o ...
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Positioning (marketing)
Positioning refers to the place that a brand A brand is a name, term, design, symbol or any other feature that distinguishes one seller's good or service from those of other sellers. Brands are used in business, marketing, and advertising for recognition and, importantly, to create an ... occupies in the minds of the customer In sales, commerce, and economics, a customer (sometimes known as a :wikt:client, client, buyer, or purchasing, purchaser) is the recipient of a Good (economics), good, service (economics), service, product (business), product or an Intellectual p ...s and how it is distinguished from the products of the competitors and different from the concept of brand awareness Brand awareness is the extent to which customers are able to recall or recognize a brand under different conditions. Brand awareness is one of two dimensions from brand knowledge, an associative network memory model. Brand awareness is a key consi .... In order to position products or br ...
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Marketing
Marketing is the process of exploring, creating, and delivering value to meet the needs of a target market in terms of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emphasize in advertising; operation of advertising campaigns; attendance at trade shows and public events; design of products and packaging attractive to buyers; defining the terms of sale, such as price, Discounts and allowances, discounts, warranty, and return policy; product placement in media or with people believed to influence the buying habits of others; agreements with retailers, wholesale distributors, or resellers; and attempts to create Brand awareness, awareness of, Brand loyalty, loyalty to, and positive feelings about a brand. Marketing is typically done by the seller, typically a retailer or manufacturer. Sometimes tasks are contracted to a dedicated marketing firm or advertising agency. More rarely, a trade association or governm ...
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Eugen Schmalenbach
Eugen Schmalenbach (20 August 1873 – 20 February 1955) was a German academic and economist An economist is a professional and practitioner in the social sciences, social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this .... He was born in Halver Halver is a town in Germany. History Around 950 the ''Oberhof Halvara'' was first mentioned in the ''Werdener Probsteiregister''. For more than 500 years Halver was the seat of a League of the Holy Court, Fehmic court, the earliest definite evide ..., and attended the Leipzig Leipzig ( , ; Upper Saxon: ) is the most populous city in the Germany, German States of Germany, state of Saxony. Leipzig's population of 605,407 inhabitants (1.1 million in the larger urban zone) as of 2021 places the city as Germany's L ... College of Commerce starting in 1898. That college later became part of Leipzig Universit ...
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Dividend
A dividend is a distribution of Profit (accounting), profits by a corporation to its shareholders. When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-invested in the business (called retained earnings). The current year profit as well as the retained earnings of previous years are available for distribution; a corporation is usually prohibited from paying a dividend out of its capital. Distribution to shareholders may be in cash (usually a deposit into a bank account) or, if the corporation has a dividend reinvestment plan, the amount can be paid by the issue of further shares or by share repurchase. In some cases, the distribution may be of assets. The dividend received by a shareholder is income of the shareholder and may be subject to income tax (see dividend tax). The tax treatment of this income varies considerably between jurisdictions. The corporation does not r ...
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Retained Earnings
The retained earnings (also known as plowback) of a corporation is the accumulated net income of the corporation that is retained by the corporation at a particular point of time, such as at the end of the reporting period. At the end of that period, the net income (or net loss) at that point is transferred from the Profit and Loss Account to the retained earnings account. If the balance of the retained earnings account is negative it may be called accumulated losses, retained losses or accumulated deficit, or similar terminology. Any part of a credit balance in the account can be capitalised, by the issue of bonus shares, and the balance is available for distribution of dividends to shareholders, and the residue is carried forward into the next period. Some laws, including those of most states in the United States require that dividends be only paid out of the positive balance of the retained earnings account at the time that payment is to be made. This protects creditors from a c ...
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Net Income
In business and Accountancy, accounting, net income (also total comprehensive income, net earnings, net profit, bottom line, sales profit, or credit sales) is an entity's income minus cost of goods sold, expenses, depreciation and Amortization (accounting), amortization, interest, and taxes for an accounting period. It is computed as the residual of all revenues and gains less all expenses and losses for the period,Stickney, et al. (2009) Financial Accounting: An Introduction to Concepts, Methods, and Uses. Cengage Learning and has also been defined as the net increase in Equity (finance), shareholders' equity that results from a company's operations.Needles, et al. (2010) Financial Accounting. Cengage Learning. It is different from gross income, which only deducts the cost of goods sold from revenue. For households and individuals, net income refers to the (gross) income minus taxes and other deductions (e.g. mandatory pension contributions). Definition Net income can be dis ...
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