{"id":28686,"date":"2023-10-23T13:08:11","date_gmt":"2023-10-23T13:08:11","guid":{"rendered":"https:\/\/swoopfunding.com\/ca\/?post_type=business-glossary&p=28686"},"modified":"2025-04-24T13:53:00","modified_gmt":"2025-04-24T13:53:00","slug":"profit","status":"publish","type":"business-glossary","link":"https:\/\/swoopfunding.com\/ca\/business-glossary\/profit\/","title":{"rendered":"Profit"},"content":{"rendered":"

Definition<\/h3>\n

Profit, in a business context, is the financial gain or positive difference between total revenue and total expenses over a specific period of time. <\/span><\/p>\n

What is profit?<\/h3>\n

Profit is a fundamental measure of a business’s financial performance and is a key indicator of its viability and success.<\/span><\/p>\n

Formula for calculating profit:<\/span><\/p>\n

Profit = total revenue – total expenses<\/span><\/p>\n

Types of profit:<\/span><\/p>\n

    \n
  1. Gross profit<\/b><\/a>: This is the profit calculated before accounting for operating expenses. It reflects the profitability of the core business operations.<\/span><\/li>\n
  2. Operating profit (operating income<\/a>)<\/b>: This is the profit derived after accounting for operating expenses. It provides an indication of the profitability of the company’s core operations.<\/span><\/li>\n
  3. Net profit (net income<\/a>)<\/b>: This is the final profit figure after all expenses, including taxes and interest, have been subtracted from total revenue. It represents the overall profitability of the business.<\/span><\/li>\n<\/ol>\n

    Profitability is a primary measure of a business’s success. It indicates whether a company is generating sufficient income to cover costs and generate a return on investment. Profit allows a business to provide returns to its shareholders through dividends<\/a>, reinvestment, or share buybacks and will attract investors and lenders\u00a0<\/span><\/p>\n

    Example of profit<\/h3>\n

    A bakery sells cupcakes for $3 each. The cost to make each cupcake, including ingredients and labor, is $1. After selling 100 cupcakes, the bakery’s total revenue is $300 ($3 x 100) and the total cost to make the cupcakes is $100 ($1 x 100).<\/p>\n

    Therefore, the bakery’s profit is $200.<\/p>\n","protected":false},"author":1,"template":"","class_list":["post-28686","business-glossary","type-business-glossary","status-publish","hentry"],"acf":[],"featured_image_urls_v2":{"full":"","thumbnail":"","medium":"","medium_large":"","large":"","1536x1536":"","2048x2048":"","image_blog":"","image_podcast":"","image_banking":"","image_blog_internal":"","image_blog_medium":"","image_single_banking":""},"post_excerpt_stackable_v2":"

    Definition Profit, in a business context, is the financial gain or positive difference between total revenue and total expenses over a specific period of time. What is profit? Profit is a fundamental measure of a business’s financial performance and is a key indicator of its viability and success. Formula for calculating profit: Profit = total revenue – total expenses Types of profit: Gross profit: This is the profit calculated before accounting for operating expenses. It reflects the profitability of the core business operations. Operating profit (operating income): This is the profit derived after accounting for operating expenses. It provides an…<\/p>\n","category_list_v2":"","author_info_v2":{"name":"root","url":"https:\/\/swoopfunding.com\/ca\/author\/root\/"},"comments_num_v2":"0 comments","_links":{"self":[{"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/business-glossary\/28686","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/business-glossary"}],"about":[{"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/types\/business-glossary"}],"author":[{"embeddable":true,"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/users\/1"}],"version-history":[{"count":1,"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/business-glossary\/28686\/revisions"}],"predecessor-version":[{"id":34231,"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/business-glossary\/28686\/revisions\/34231"}],"wp:attachment":[{"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/media?parent=28686"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}