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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. Other terms See also * Gross income * Net profit * Profitability index * Rate ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economics
Economics () is a behavioral 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 analyses what is viewed as basic elements within economy, economies, 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 analyses economies as systems where production, distribution, consumption, savings, and Expenditure, investment expenditure interact; and the factors of production affecting them, such as: Labour (human activity), labour, Capital (economics), capital, Land (economics), land, and Entrepreneurship, enterprise, inflation, economic growth, and public policies that impact gloss ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Well-being
Well-being is what is Intrinsic value (ethics), ultimately good for a person. Also called "welfare" and "quality of life", it is a measure of how well life is going for someone. It is a central goal of many individual and societal endeavors. Subjective well-being refers to how a person feels about and evaluates their life. Objective well-being encompasses factors that can be assessed from an external perspective, such as health, income, and security. Individual well-being concerns the quality of life of a particular person, whereas community well-being measures how well a group of people functions and thrives. Various types of well-being are categorized based on the domain of life to which they belong, such as physical, psychological, emotional, social, and economic well-being. Theories of well-being aim to identify the Essence, essential features of well-being. Hedonism argues that the balance of pleasure over pain is the only factor. Desire theories assert that the satisfact ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Anwar Shaikh (Economist)
Anwar M. Shaikh ( Sindhi: انور شيخ) is a Pakistani American heterodox economist in the tradition of classical political economy and Marxian economics. He is Professor of Economics in the Graduate Faculty of Social and Political Science at The New School for Social Research in New York City, where he has taught since 1972. Early life and education Shaikh was born in Karachi into a Liberal Sindhi family in 1945. He traveled extensively at an early age and attended schools and lived for various lengths of time in Ankara, Washington, D.C., New York City, Lagos, Kuala Lumpur, and Kuwait. He graduated from Stuyvesant High School in New York City in 1961, received a B.S.E from Princeton University in 1965, worked for two years in Kuwait, and then returned to the United States to study at Columbia University, from which he received his Ph.D. in Economics in 1973. In 1972 he joined the Economics Department at the Graduate Faculty of the New School for Social Research. He t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
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 and loss statement'' (P&L), ''statement of profit or loss'', ''revenue statement'', ''statement of financial performance'', ''earnings statement'', ''statement of earnings'', ''operating statement'', or ''statement of operations'') is one of the financial statements of a company and shows the company's revenues and expenses during a particular period. It indicates how the revenues (also known as the ''“top line”'') are transformed into the net income or net profit (the result after all revenues and expenses have been accounted for). The purpose of the income statement is to show managers and investors whether the company made money (profit) or lost money (loss) during the period being reported. An income statement represents a period of time (as does the cash flow statement). This contrasts with the balance sheet, which represe ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Profit Model
The profit model is the linear, deterministic algebraic model used implicitly by most cost accountants. Starting with, profit equals sales minus costs, it provides a structure for modeling cost elements such as materials, losses, multi-products, learning, depreciation etc. It provides a mutable conceptual base for spreadsheet modelers. This enables them to run deterministic simulations or 'what if' modelling to see the impact of price, cost or quantity changes on profitability. Basic model : \pi = pq - (F_n+wq) \, where: : is profit : ''p'' is sales price : ''F''''n'' is fixed costs : ''w'' is variable costs per unit sold : ''q'' is quantity sold For an expansion of the model see below. Background The justification for wanting to express profit as an algebraic model is given by Mattessich in 1961: :'To some operations analysts the mere translation of accounting models into mathematical :terminology, without a calculus for determining an optimum, might appear to be a ra ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Rate Of Profit
In economics and finance, the profit rate is the relative profitability of an investment project, a capitalist enterprise or a whole capitalist economy. It is similar to the concept of rate of return on investment. Historical cost ''vs.'' market value The rate of profit depends on the definition of ''capital invested''. Two measurements of the value of capital exist: capital at historical cost and capital at market value. Historical cost is the original cost of an asset at the time of purchase or payment. Market value is the re-sale value, replacement value, or value in present or alternative use. To compute the rate of profit, replacement cost of capital assets must be used to define the capital cost. Assets such as machinery cannot be replaced at their historical cost, but must be purchased at the current market value. When inflation occurs, historical cost would not take account of rising prices of equipment. The rate of profit would be overestimated, using lower historic ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Return On Equity
The return on equity (ROE) is a measure of the profitability of a business in relation to its equity; where: : Jason Fernando (2023)"Return on Equity (ROE) Calculation and What It Means" Investopedia Thus, ROE is equal to a fiscal year's net income (after preferred stock dividends, before common stock dividends), divided by total equity (excluding preferred shares), expressed as a percentage. Because shareholder's equity can be calculated by taking all assets and subtracting all liabilities, ROE can also be thought of as a return on NAV, or ''assets less liabilities''. Usage ROE measures how many dollars of profit are generated for each dollar of shareholder's equity, and is thus a metric of how well the company utilizes its equity to generate profits. ROE is especially used for comparing the performance of companies in the same industry. As with return on capital, an ROE is a measure of management's ability to generate income from the equity available to it. ROEs of 15–2 ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Return On Assets
The return on assets (ROA) shows the percentage of how profitable a company's assets are in generating revenue. ROA can be computed as below: :\mathrm = \frac The phrase return on average assets (ROAA) is also used, to emphasize that average assets are used in the above formula. This number tells you what the company can do with what it has, ''i.e.'' how many dollars of earnings they derive from each dollar of assets they control. It's a useful number for comparing competing companies in the same industry. The number will vary widely across different industries. Return on assets gives an indication of the capital intensity of the company, which will depend on the industry; companies that require large initial investments will generally have lower return on assets. ROAs over 5% are generally considered good. Usage Return on assets is one of the elements used in financial analysis using the Du Pont Identity. See also *Return on equity (ROE) *List of business and finance abbre ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Rate Of Return
In finance, return is a profit on an investment. It comprises any change in value of the investment, and/or cash flows (or securities, or other investments) which the investor receives from that investment over a specified time period, such as interest payments, coupons, cash dividends and stock dividends. It may be measured either in absolute terms (e.g., dollars) or as a percentage of the amount invested. The latter is also called the holding period return. A loss instead of a profit is described as a '' negative return'', assuming the amount invested is greater than zero. To compare returns over time periods of different lengths on an equal basis, it is useful to convert each return into a return over a period of time of a standard length. The result of the conversion is called the rate of return. Typically, the period of time is a year, in which case the rate of return is also called the annualized return, and the conversion process, described below, is called ''annualiz ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Profitability Index
Profitability index (PI), also known as profit investment ratio (PIR) and value investment ratio (VIR), is the ratio of payoff to investment of a proposed project. It is a useful tool for ranking projects because it allows you to quantify the amount of value created per unit of investment. Under capital rationing, PI method is suitable because PI method indicates relative figure i.e. ratio instead of absolute figure. The ratio is calculated as follows: *\text = \frac = 1 + \frac Assuming that the cash flow calculated does not include the investment made in the project, a profitability index of 1 indicates break-even. Any value lower than one would indicate that the project's present value ( PV) is less than the initial investment. As the value of the profitability index increases, so does the financial attractiveness of the proposed project. The PI is similar to the Return on Investment (ROI), except that the net profit is discounted In finance, discounting is a mechanism ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Net Profit
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, and other expenses for an accounting period. It is computed as the residual of all revenues and gains less all expenses and losses for the period,Weil, Schipper, Francis. (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.Weil, Schipper, Francis. (2010) Financial Accounting. Cengage Learning. It is different from gross income, which only deducts the cost of goods sold from revenue. For Household, households and individuals, net income refers to the (gross) income minus taxes and other deductions (e.g. mandatory pension cont ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Gross Income
For households and individuals, gross income is the sum of all wages, salaries, profits, interest payments, rents, and other forms of earnings, before any deductions or taxes. It is opposed to net income, defined as the gross income minus taxes and other deductions (e.g., mandatory pension contributions). For a business, gross income (also gross profit, sales profit, or credit sales) is the difference between revenue and the cost of making a product or providing a service, before deducting overheads, payroll, taxation, and interest payments. This is different from operating profit (earnings before interest and taxes). Gross margin is often used interchangeably with gross profit, but the terms are different. When speaking about a monetary amount, it is technically correct to use the term "gross profit", but when referring to a percentage or ratio, it is correct to use "gross margin". Relationship with other accounting terms The various deductions (and their corresponding me ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
