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Profit (economics) 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. [2]
Profit, in accounting, is an income distributed to the owner in a 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.
Profit margin is a financial ratio that measures the percentage of profit earned by a company in relation to its revenue. Expressed as a percentage, it indicates how much profit the company makes for every dollar of revenue generated. Profit margin is important because this percentage provides a comprehensive picture of the operating efficiency ...
In business and 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, interest, and taxes for an accounting period.
Here too the profit is not maximized and the firm has to lower its output level to maximize profits. In economics, profit maximization is the short run or long run process by which a firm may determine the price, input and output levels that will lead to the highest possible total profit (or just profit in short).
The profit motive is a key tenet of rational choice theory, or the theory that economic agents tend to pursue what is in their own best interests. In accordance with this doctrine, businesses seek to benefit themselves and/or their shareholders by maximizing profits . As it extends beyond economics into ideology, the profit motive has been a ...
Americans are traveling in record numbers this summer, but Delta Air Lines saw second-quarter profit drop 29% due to higher costs and discounting of base-level fares across the industry.
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.