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Definition of Controllable profit
The profit made by a division after deducting only those expenses that can be controlled by the
The ratio of net income to net sales.
The ratio of net income before taxes to net sales.
The cumulative book income plus any gain or loss on disposition of the assets on termination of the SAT.
Gross profit divided by sales, which is equal to each sales dollar left over after paying
Net income divided by sales; the amount of each sales dollar left over after all expenses
The ratio of operating margin to net sales.
Indicator of profitability. The ratio of earnings available to stockholders to net sales.
The present value of the future cash flows divided by the initial investment. Also called
Ratios that focus on the profitability of the firm. profit margins measure performance
A probability used to determine a "sure" expected value (sometimes called a
The profit a company makes before expenses and taxes are taken away.
What’s left over after you subtract the cost of goods sold and all your expenses from sales.
A method for understanding the relationship between revenue, cost and sales volume.
The difference between the price at which goods or services are sold and the cost of sales.
See operating profit.
The profit made by the business for an accounting period, equal to gross profit less selling, finance, administration etc. expenses, but before deducting interest or taxation.
The difference between income and expenses.
Profit and Loss account
A financial statement measuring the profit or loss of a business – income less expenses – for an accounting period.
Profit before interest and taxes (PBIT)
A division or unit of an organization that is responsible for achieving profit targets.
See cash value added.
The amount of profit after deducting interest, taxation and dividends that is retained by the business.
The result of subtracting cost of goods sold from sales. Synonymous with gross margin.
cash flow from operating activities, or cash flow from profit
This equals the cash inflow from sales during the period minus the cash
gross margin, or gross profit
This first-line measure of profit
See earnings before interest and income tax (EBIT).
The general term profit is not precisely defined; it may refer to net
profit and loss statement (P&L statement)
This is an alternative moniker
This concept refers to a separate source of revenue and
Ratios based on sales revenue for a period. A measure of
Profit Margin Ratio
A measure of how much profit is earned on each dollar of sales. It
A method for determining the profitability of an investment. It is
a cost over which a manager has the ability to authorize incurrence or directly influence magnitude
the budget variance of the two variance approach to analyzing overhead variances
analysis a procedure that examines
the fixed overhead volume variance;
a temporary absorption costing profit caused
a responsibility center in which managers are responsible for generating revenues and planning and controlling all expenses
the ratio of income to sales
an incentive payment to employees that is
a visual representation of the amount
profitability index (Pl)
a ratio that compares the present value of net cash flows to the present value of the net investment
pseudo microprofit center
a center for which a surrogate
real microprofit center
a center whose output has a market value
An entity within a corporation against which both revenues and costs are
Ratio of net present value to initial investment.
Profit Sharing Plan
A retirement plan generally funded by a percentage of company
Revenue less cost of goods sold.
Gross Profit Margin
Gross profit divided by revenue.
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