Skip to main content

What is Profit?

Definition and meaning of Profit:

praa·fuht

Profit is the difference between what it costs to produce something and what you sell it for.

If you’re selling a product for more than it costs, you’re making a profit. It indicates how your business is functioning and performing in the market.

Profit calculation

To calculate your profit, you need to consider a wide range of costs, like material costs, labor costs, overhead expenses, and marketing costs.

  • Positive number – you’re turning a profit
  • Negative number – your business is losing money
  • Zero – you’re breaking even

For example, your business has a revenue of $80,000 per year, and your expenses are $20,000, so your net annual profit is $60,000.

Profit formula

Profit = Revenue – Expenses

Share:  

People also searched for

Want to learn marketing jargon?

We send daily emails with new marketing words.