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Financial Terms | |
profit center |
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Definition of profit centerprofit centera responsibility center in which managers are responsible for generating revenues and planning and controlling all expenses Profit centerAn entity within a corporation against which both revenues and costs are
Related Terms:pseudo microprofit centera center for which a surrogate real microprofit centera center whose output has a market value activity centera segment of the production or service After-tax profit marginThe ratio of net income to net sales. Before-tax profit marginThe ratio of net income before taxes to net sales. Book profitThe cumulative book income plus any gain or loss on disposition of the assets on termination of the SAT. ![]() cash flow from operating activities, or cash flow from profitThis equals the cash inflow from sales during the period minus the cash Commodities Exchange Center (CEC)The location of five New York futures exchanges: Commodity Controllable profitThe profit made by a division after deducting only those expenses that can be controlled by the cost centera responsibility center in which the manager has Cost–volume–profit analysis (CVP)A method for understanding the relationship between revenue, cost and sales volume. cost-volume-profit (CVP)analysis a procedure that examines Distribution centerA branch warehouse containing finished goods and service gross margin, or gross profitThis first-line measure of profit GROSS PROFITThe profit a company makes before expenses and taxes are taken away. ![]() Gross profitThe difference between the price at which goods or services are sold and the cost of sales. Gross profitThe result of subtracting cost of goods sold from sales. Synonymous with gross margin. Gross ProfitRevenue less cost of goods sold. Gross profit marginGross profit divided by sales, which is equal to each sales dollar left over after paying Gross Profit MarginGross profit divided by revenue. investment centera responsibility center in which the manager Money center banksBanks that raise most of their funds from the domestic and international money markets, relying less on depositors for funds. Net profitSee operating profit. Net profit marginNet income divided by sales; the amount of each sales dollar left over after all expenses Operating profitThe 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. operating profitSee earnings before interest and income tax (EBIT). Operating profit marginThe ratio of operating margin to net sales. phantom profita temporary absorption costing profit caused PROFITWhat’s left over after you subtract the cost of goods sold and all your expenses from sales. ProfitThe difference between income and expenses. profitThe general term profit is not precisely defined; it may refer to net Profit and Loss accountA financial statement measuring the profit or loss of a business – income less expenses – for an accounting period. profit and loss statement (P&L statement)This is an alternative moniker Profit before interest and taxes (PBIT)See EBIT. Profit centreA division or unit of an organization that is responsible for achieving profit targets. Profit marginIndicator of profitability. The ratio of earnings available to stockholders to net sales. profit marginthe ratio of income to sales Profit Margin RatioA measure of how much profit is earned on each dollar of sales. It profit moduleThis concept refers to a separate source of revenue and profit ratiosRatios based on sales revenue for a period. A measure of profit sharingan incentive payment to employees that is Profit Sharing PlanA retirement plan generally funded by a percentage of company profit-volume grapha visual representation of the amount Profitability indexThe present value of the future cash flows divided by the initial investment. Also called Profitability indexSee cash value added. Profitability IndexA method for determining the profitability of an investment. It is profitability indexRatio of net present value to initial investment. profitability index (Pl)a ratio that compares the present value of net cash flows to the present value of the net investment Profitability ratiosRatios that focus on the profitability of the firm. profit margins measure performance Reinvoicing centerA central financial subsidiary used by an MNC to reduce transaction exposure by having responsibility centera cost object under the control of a manager Retained profitsThe amount of profit after deducting interest, taxation and dividends that is retained by the business. revenue centera responsibility center for which a manager is accountable only for the generation of revenues and has no control over setting selling prices, or budgeting or incurring costs Risk-adjusted profitabilityA probability used to determine a "sure" expected value (sometimes called a residual incomethe profit earned by a responsibility center that exceeds an amount "charged" for funds committed to that center Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |