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In economics, profit is the difference between revenue that an economic entity has received from its outputs and total costs of its inputs, also known as surplus value. [1] It is equal to total revenue minus total cost, including both explicit and implicit costs.
It is the total pool of profits available to provide a cash return to those who provide capital to the firm. Capital is the amount of cash invested in the business, net of depreciation. It can be calculated as the sum of interest-bearing debt and equity or as the sum of net assets less non-interest-bearing current liabilities (NIBCLs).
Market conditions: “Economic trends, ... To indicate how effectively your company converts income into profit, calculate the net profit margin: Net Profit Margin = (Net Revenue* / Total Revenue ...
Net profit: To calculate net profit for a venture (such as a company, division, or project), subtract all costs, including a fair share of total corporate overheads, from the gross revenues or turnover.
Profit margin is calculated with selling price (or revenue) taken as base times 100. It is the percentage of selling price that is turned into profit, whereas "profit percentage" or "markup" is the percentage of cost price that one gets as profit on top of cost price.
Economic Profit is the residual wealth calculated by deducting the cost of capital from the firm's operating profit. It is defined as: Net Operating Profit After Taxes (NOPAT) - Cost of Capital Employed - NOPAT (Net Operating Profit After Tax) NOPAT = EBIT x (1 - Tax Rate) NOPAT measures a company's potential cash earnings.
Profit maximization using the total revenue and total cost curves of a perfect competitor. To obtain the profit maximizing output quantity, we start by recognizing that profit is equal to total revenue minus total cost (). Given a table of costs and revenues at each quantity, we can either compute equations or plot the data directly on a graph.
The economic calculation problem (ECP) is a criticism of using central economic planning as a substitute for market-based allocation of the factors of production. It was first proposed by Ludwig von Mises in his 1920 article " Economic Calculation in the Socialist Commonwealth " and later expanded upon by Friedrich Hayek .