Definition
Profit is the money left after paying expenses. In a company's earnings, there are three main types of profit to look for:
- Gross profit: Remaining money after paying for goods or services a company sells
- Operating profit: What remains after a company also pays operating costs, such as rent, electricity, phones, Wi-Fi and, in some cases, employees or contractors
- Net profit: The final figure that represents what a company made after deducting all costs, debts, and taxes. In other words, net profit is what a company gets to keep.
Investors look at a company’s profit to decide whether it has been successful in the quarter, where:
- Gross profit shows the capability of the company to make money
- Operating profit indicates that that company is making money
- Net profit reveals how much money remains in the hands of the company after taxes and costs
We acknowledge and thank the FMA, Dr Karena Kelly and Brook Taurua Grant, the RBNZ and the Māori Dictionary for their research which helped us with te Reo Māori kupu for this glossary.
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